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Negating My Negativity On Homebuilders

|Includes:AAPL, M.D.C. Holdings, Inc. (MDC)

On May 28, Seeking Alpha published an article by me titled 5 Reasons For Caution On Housing Stocks.

This reflected prices as of Friday, May 24. At that time, the main homebuilder ETF that I follow, with the symbol ITB, had closed at $25.39. It closed today at $21.75. Several leading homebuilding stocks have had fault found either with their June quarter earnings or their forward guidance or various metrics. I'm neither bearish nor bullish on the group now. Futures positioning by speculators again shows lots of bullishness on stocks but for the first time in a while, also shows lots of bearishness on bonds. I therefore think that we might be setting up for a counter-trend rally in bonds, which would benefit the homebuilders.

Thus, I bought a bit of MDC Holdings back around its closing price of $31.12 late today ahead of earnings tomorrow. I had traded it at a higher price last September and made a couple of points. Earnings estimates are now materially higher. This has always been a decent quality builder. (It is not, however, on the bargain counter.)

Finally, I have realized the importance of updating "calls", especially when they are negative. My last Apple (NASDAQ:AAPL) article was negative. The stock duly dropped, and I reversed my negativity on the Braeburn Forum, where I serve as a moderator, around $390. Unfortunately, I neglected to also do so on an Instablog. Well, better late than never.

Disclosure: I am long MDC.

Additional disclosure: Not investment advice.

Stocks: MDC, AAPL