Cramer Bullish on Crack-House Boom
For the 87th time over the past three years, Jim Cramer has called a bottom (subscription required) in home-building stocks:
“I am banking on a bottom in the HGX.”
Cramer cited the Census Bureau’s estimate of home sales once again. The last time he did that, he got crushed.
While the spring selling season can only be described as a total disaster, there are some signs that home sales are rising. The Wall Street Journal ran a story today titled “Home Sales Rise in Hard-Hit Areas“. Here is a quote:
“For the first four months of this year, home sales in Detroit, excluding suburbs, totaled 3,360, up 48% from a year earlier, according to the Michigan Association of Realtors. The average price dropped 56% to just $20,514. That average is so low because many of the sales involve decrepit homes in neighborhoods with few jobs.”
So banks are finally unloading foreclosed crack houses. Let the good times roll!
I wish Cramer luck, but he really ought to know an over-sold bounce when he sees one. The last two daily bars on the XHB chart look like the beginnings of a bearish “flag” pattern.
