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Fast Flash: Homebuilder ETF Breaks Out

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FAST FLASH: HOMEBUILDER ETF BREAKS OUT

The XHB has now returned to levels not see since last October. Kind of surprising, don't you think?

According to analysts at Wachovia it has to do with CDS spreads.

“The firm said a window has opened up for the builders due to the positive spread between their Credit Default Swaps & bond yields. The firm said the cost to buy 5-year senior CDS for builders has declined by 31% over the last 2 months and in some cases the cost of CDS is well below bond yields, which provides an opportunity for a carry trade,” writes the StreetInsider.

Want to know more?

For complete details on the trend as well as how to trade it, check out our interview with Jim Delaney of Saratoga Capital to your left.


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