zitterbewegung

In these two posts (click on the embedded link for the first post), I warned about the coming bearish action for the homebuilders group. Please note the careful distinction between "bearish" and "correction"; always careful with my word selection, I many times still confuse rather than enlighten.

Anyway, as I scan various Wall Street research and investing blogs, I am not surprised to discover these stocks continue to be recommended for purchase. That will again be the case -- someday. Until then, however, lower prices beckon.

First arrives the possible support at the fast-approaching 200-day simple moving average (sma) -- and my forecasted initial decline of ~30%. If this specific sma successfully arrests the price decline for each stock, then the decline could be characterized as a "correction" within a continuing bull market for this group. However, there is nothing in the charts that indicate the 200-day sma will be anything other than a speed bump on the way to lower prices. This then qualifies or denotes as bearish action; i.e., a pattern of lower highs and lower lows.

Continue to stand aside, as long side trades are solely for the nimble, and fleet of (trigger) finger. Short sale bets will likely continue to pay handsomely.

Comments? Questions?