Retail, Homebuilders ETFs See The Light

January 23, 2008 at 10:00 am by Tom Lydon      Bookmark and Share

101059987 SPDR S&P Homebuilders (XHB) and Retail HOLDRs (RTH) are two of the few exchange traded funds (ETFs) seeing positive numbers these days.

Yesterday, XHB was up 8.5% and is up over 4% at the time of this post. Its one-week performance is 14.2% (not counting today). RTH was up 3.6% yesterday, is up today and over one-week it’s up 5.8%.

This is especially interesting, considering these are two of the sectors that have taken a beating. The holiday season was one last hope for a retail rebound, with Wall Street jittery about consumer spending and the overall well-being of the economy. The high energy prices and falling home values certainly didn’t help more wallets to open. The current down trend didn’t exactly foretell any good news emerging from these two sectors.

As the housing slump is bending to new lows, it could be a sign of relief for investors in XHB. Some analysts are expecting this mortgage mess and slowdown to rival that of the late ’70s to the ’80s.

For those investors still building hope on XHB, remember to have a disciplined sell strategy, and enjoy the positive numbers showing now. Homebuilding and real estate sectors have been down as the building of new homes and housing starts were down 8%. The good news is, whatever goes down must eventually come back up.

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  • BruceS
    This may be just a bounce with lots of shorts being covered. Suggest you keep a close eye on these two sectors and place Stop-loss on them in the morning, if not now. There are so many more homes yet to go on the market...
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