In this clip from today’s edition of The Macro Show, Hedgeye CEO Keith McCullough describes the fundamental bull case for Housing, as well as the quantitative Signals he’s waiting for to start building his long position.
“There’s a long-term bull case for home prices, we know that. And it’s a huge component of CPI… that being said, I’m not buying the Home Construction ETF (ITB) because:
A) The backtest is unfavorable for $ITB in #Quad2
B) The Signal (which trumps the Quads) is also quantitatively bad at the moment”
“We also have housing demand accelerating (via Mortgage Purchase Applications) against some easier base effects. I gave you two fundamental reasons to buy Housing, and a Signal and a Quad that says don’t do it yet.
It’s hard for people to take that. We try to get the fundamentalists to understand that timing matters… we know why we’d get long Housing, but when we’d get long Housing is a much better answer.”