[isatrader]

I'm back from my holiday and it looks like there's been some good discussion over the last week on here. Firstly I like to say a big welcome to gbarbs and notanewmember who both have made excellent initial content contributions to the site - so thank you and I hope it continues.

Ok, onto what's been discussed beginning with short interest. This is not an area I've done any work on yet, so thanks to goodtyneguy for his answer to gbarbs and the link to shortsqueeze.com - which looks a very useful tool for short interest research. I will add this subject to the to do list to be researched further on the site.

Secondly is the discussion about homebuilder stocks in the US and the UK. I put LEN on the watchlist a week or so back as it broke down from a six month Stage 3 range and moved into early Stage 4 (Stage 4A), well below it's major moving averages which are turning lower. The Dow Jones US Home Construction Index ($DJUSHB) which is the average for all the stocks in the sector is also very close to early Stage 4, and so I'd rate the sector as a Stage 3B currently (late in Stage 3), as it's relative performance line versus the S&P 500 has broken down below it's 52 week MA (Mansfield zero line), volume has increased and the 30 week MA is flattening out.

       

Using the chartmill.com sector table - which allows you to rank by the average Mansfield Relative Strength reading for each group - the sector is currently 96th out of 213 sectors, and so it's now only an average sector, after being one of the top sectors in 2012, and LEN itself is near the bottom in the group, along with MDC, NVR, DHI and TOL which are all in similar stages.

I've attached the LEN charts below, and I've also included the monthly and weekly technical attributes charts as these show why I think it's very early Stage 4 on the weekly basis (zero out of 9 technical attributes score), but also has longer term strength as the monthly chart is in Stage 2, and is just beginning it's first significant pullback with a monthly close below the 10 month moving average, but still has a monthly technical attributes score of 9 out of 9, and is well above it's 30 month MA - which comes in around the 27 level. And so a weekly Stage 4 move to the swing target of roughly 29 would still keep it in a longer term "monthly" Stage 2 and so hence why it should only be considered for more aggressive short term traders imo, for a quick trader play, as the longer term trend is very much intact and could reassert itself if the broad market doesn't breakdown further, as currently all of the key major US indexes are above their 30 week moving averages still.

LEN - Monthly and Weekly Technical Attributes Charts

   

LEN - Weekly and Daily Weinstein Charts

   

The UK however is different as notanewmember noted, with the Household Goods and Home Construction Sector (NMX3720) still very strong in Stage 2B above it's rising 30 week MA, with good relative performance versus the market. The sector is also the fourth strongest out of the 38 UK sectors and so is definitely not a sector to be shorting using Weinstein's method. See attached below.