SPDR HOMEBUILDERS ETF (XHB)

Home construction ETF’s? He likes this as an idea. This has building materials companies along with some of the homebuilders. You could look at this or iShares US Home Construction (ITB-N).

(Short) Homebuilders tends to really fall off in March or April and drop down into the summertime. From 1990 to 2014 from April 27 into June 19 this sector tends to be positive only 29% of the time and produces an average of 4% loss. It is underperforming the S&P 500 at this time, and there is still some legs on this trade.

This has mostly the builders along with some of the materials companies. He thinks the housing recovery is a long-term theme, and we are probably in the 5^th inning of that and that it will continue.

Homebuilders have been a little bit off. Short term chart shows it may be starting to break the current little down draft it has had since March. The 3 year chart showed the long term up trend broken. Not the best looking chart.

(Top Pick Oct 25/13, Up 4.62%) It is strong from October to beginning of February. In 2012 the bull market overcame seasonality. This is a good time to be getting out while it is at resistance after a strong run. He will consider this one again next October.

He owns iShares DJ Home Construction (ITB-N) which is very similar but consists of 65% of actual homebuilders while this one has only 29%. The rest is mattress companies, building stores, etc. Likes the sector. If you like the homebuilders then Buy the homebuilders.

There is a definite trend with homebuilders over the years. From 1990 to 2012 from this time of the year, basically into February, it has had a positive run of 20% and has been up 86% of the time. Right now there is consolidation taking place leading into the seasonal period.

Home builders have started to correct quite a bit. He is not sure that interest rates are going up. If we come back to the $28 area and that support holds that is a good entry point.

Home builders and Home Depot and Lowe's and some of the manufacturers. Wait for a correction.

Owned this and had a great run with it last year but switched his holdings over to US banks. Housing was key to getting something going. Doesn’t think this will go down, but it is an older story and there is still a lot of room in financials. It’s housing that will move financials.