Sunday, April 16, 2006

Somebody 'Splain This to Me



What did the guy mean when he said "Head and shoulders top?"

14 comments:

Anonymous said...

Is that a serious or a rhetorical question?

Anonymous said...

If it was serious, this will explain it:

http://www.marketwatch.com/premium/theTechnicalIndicator_Glossary.asp?siteid=mktw&h_view=2#H

incessant_din said...

It's even more pronounced if you plot it on a linear scale. http://ichart.finance.yahoo.com/z?s=TOL&t=2y&q=l&l=off&z=m&a=v&p=s

I like the marketwatch link's reference to breaking the neckline.

Rob Dawg said...

Anon, thanks for the link but of course it was rhetorical. When somebody links a two year log graph onto their blog that fairly screams "sell, stupid!" it is a safe bet they know about technical analysis. I'm not a technician and generally don't put very much weight. Too often it seems like driving in the rearview mirror but this graph looks like it was made up to describe head and shoulders to novice. I'm pretty sure TOL stock is going to be punished badly even though it is a decent company.

in_din, you are right linear looks even worse. Good call.

Anonymous said...

You're right that the TOL graph is a vivid example of a head and shoulders top. Anybody who bought any of the big builder's equities in '05 could be in for a spell before those prices are visited again.

Rob Dawg said...

For general edification, I glance at:

PHLX HOUSING SECTOR INDEX (^HGX)

http://finance.yahoo.com/q/cp?s=%5EHGX

A fast and easy quick look at the Housing stocks. Why the heck they got WEYERHAEUSER in there I don't know.

Anonymous said...

Robert, as one of the world's largest lumber and forest products suppliers, they have long been considered integral to the housing sector.

Anonymous said...

I can't seem to find an earlier thread where I posted a comment that has turned out to be, thankfully, wrong.

I had stated that the expansion of the powers eminent domain represented by the recent Supreme Court ruling in Kelo v New London were being left unchallenged by state and local authorities. I was wrong about that.

http://www.latimes.com/news/nationworld/nation/la-na-eminent16apr16,0,7794500.story?coll=la-home-headlines

incessant_din said...

Weyerhaeuser owns Pardee homes, one of the players in the CA/NV market. Last year, NIMBYs in Livermore succeeded in keeping Pardee from adding about 3K homes on the farmland north of town (this time around).

My personal guess is that Pardee probably had some kind of street layout that made sense, and was therefore antithetical to Livermore's principles of minimizing thoroughfare usability.

I personally like the open space, but I would prefer if they actually used the land for some productive agriculture. It currently lies mostly fallow, except for occasional grazing. Other than grapes, that is. I am blown away that there is actually enough of a market to support all of the grapes planted in California. How about mixing in some Bell Peppers, so I don't have to pay $2.99/lb for green ones, and $3.99+ for red, gold, or orange?

Wow. That factoid devolved into a rant.

Rob Dawg said...

I_din, thanks. I never even bothered to look (obviously, duh). I just remembered WY from my days in the paper industry and stupidly assumed they were pretty much the same company. What got my attention was their general tendency to buck the trend (up and down) from the rest of the Philly Housing Index (^HGX).

As to Pardee, I don't like them. Just gut emotion, they turn everyplace they touch in McGenericville. Remember, I live in Camarillo. This is where Pardee started in the 1920s or something ancient like that. Camarillo is also where they learned their techniques of mass production, political manipulation and sleazy salesmanship starting in the 1970s.

incessant_din said...

I didn't mean to sound sympathetic to Pardee. It was the first time I got to see up close what a developer does as part of their misinformation campaign. There were all sorts of great stories. They were pimping the project as "Livermore Trails," with patently misleading petition stations. My favorite comes from the beginning of the campaign, when they had these really green maps on display, with trails drawn all over (while majorly de-emphasizing the developments on the map), and some guy signed the petition at the grocery store. When his wife found out, she blew a gasket, berated him, then went to the petitioners to get his name removed. Poor guy, I bet he can't go shopping by himself anymore. Well, after that episode made the local press, the cat was out of the bag, and the effort failed miserably.

I wish Livermore had a better conservation plan than simply "no development, except when more land can be converted to vineyards in exchange". I lived for years in the Chino area, and I was pretty disappointed when they didn't renew the dairy preserve. Yeah, cows stink. But people stink more. At least the cows did something useful. They kept traffic off the road. Now they're infilling with warehouses for products (that the US is not producing) and warehouses for people (zero-yard McMansions).

Oh, by the way Livermore... Rancho Cucamonga and Ontario used to have large tracts of vineyards, but that stuff is almost all gone now. Economies change, and diversity is a big plus.

How do you like Camarillo Robert? Has the traffic reached critical mass?

Rob Dawg said...

I love the Camarillo area. Hate the City as an organization. This is one of those don't get me started issues. Why wouldn't i love it? I pay low taxes, live in a nice place with low mortgage and the traffic is fine as long as you don't go to Oxnard or the Valley. The weather is honestly, not just talk, among the best in the world. My schools are good enough that I save 10s of thousands in tuition, not an easy feat in California. Good air, low crime, etc. Could I recommend it today? No way. Too expensive to buy in. Even the Pardee constructed homes.

CA Renter said...

Robert,

FWIW, I had a friend who worked for Weyerhauser in the last downturn. The company took a serious hit. I would include this on the "think about shorting" list.

Anonymous said...

the only problem with shorting weyer is that they could ship a lot of those building materials to asia....they might have a "real estate" bubble, but it has nothing to do with wooden houses.

It would be mean to ship those pardee homes to china.