No.1 - Is The Worst Over?

It may finally be getting easier to sell that house of yours again. The SPDR S&P Homebuilders (XHB) has turned this month, jumping 6% over the last five days alone. More than half of that came today on comments from Treasury Secretary Hank Paulson who suggested the housing sector may get a little better. Is the worst over?

Guy Adami updates his Toll Brothers (TOL) trade on the housing market. He recommends investors stop out any close below $27.75. The stock closed at $30.25 and Guy adds, as a trade, he still loves this name.

The Top Three #1
The Top Three #1   

Pete Najarian likes Standard Pacific (SPF) because option investors are buying June 22, June 25 and July 25 calls. That suggests to Pete that the housing market is near a bottom.

Eric Bolling couldn’t disagree more. He reminds DR Horton (DHI) CEO had said all 12 months are going to “suck” for his company. Homebuilders are down 9% year to date, he notes.

Jeff Macke says Hank Paulson is talking his book.

Look at a company like Dell (DELL), Jeff says. The fundamentals aren’t getting better but investors can own the stock as a trade. It’s the same thing for the homebuilders. He thinks they go higher from here and that’s a trade.

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Trader disclosure: On May 22, 2007, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders: Macke Owns (SWY); Najarian Owns (MDT), (STI); Bollings Owns Coffee, Sugar, Gold, Silver, March Natural Gas Futures, Is Short April Natural Gas Futures