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Housing Double Dip?

The XHB closed lower Friday after DR Horton sparked fresh worried about the housing market. The number 2 U.S. homebuilder reported a fourth-quarter loss that was wider than expected and said market conditions were "still challenging."

“Our industry continues to face many challenges," such as high levels of existing inventory and foreclosures, low consumer confidence and tight credit, said Chief Executive Don Tomnitz during a conference call with analysts. "These headwinds continue to impact our business."

The commentary came in the same week that data showed new housing starts fell to their lowest level in six months in October.

What must you know to trade the space?

Expect to see a weak housing market through the spring selling season, says Fox-Pitt Kelton analyst Rob Stevenson. And with 10% unemployment I’m not sure now quickly demand comes back.

If you’re looking to trade the space Toll is my favorite name, says Stevenson. But it’s really just the best house on a bad block. I see very few data points that would have me worried if I was short this group.

In the space I like Meritage Homes , adds Joe Terranova. When the real estate market turns around, I think they win.


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Trader disclosure: On Nov. 20th, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Pete Najarian Owns (DE) Calls; Pete Najarian Owns (DELL) Calls; Pete Najarian Owns (GE) Calls; Pete Najarian Owns (INTC), Is Short (INTC) Calls; Pete Najarian Owns (KRE) Calls; Pete Najarian Owns (LLY) Calls; Pete Najarian Owns (UUP) Calls; Pete Najarian Owns (BRCD), Is Short (BRCD) Calls; Pete Najarian Owns (LAZ), Is Short (LAZ) Calls; nerman's Firm Is Short (IJR), (IWM), (MDY), (SPY), (USO), (UNG), (TLT); nerman's Firm Owns (CLX), (CSCO), (MSFT), (NOK), (WMT), (SFC), (M); nerman's Firm Owns (BAC) Preferred, (BAC), (BAC) Calls; Finerman Owns (BAC) Preferred, (BAC); Finerman's Firm And Finerman Own (SFC); Finerman's Firm And Finerman Own (WFC) Preferred; Finerman's Firm Owns (BCR), (BDX); Finerman's Firm Owns (BGC), (BGC) Calls; Terranova Owns (UNG) April 2010 Calls; Terranova Owns (POT), (GOOG), (AAPL), (FCX), (RIMM); Grasso Owns (AAPL), (ABK), (ASTM), (BAC), (BGP), (C), (COST), (FAZ), (PFE), (MRK), (V), (WMT)

GE Is The Parent Company Of CNBC
NBC Universal Is The Parent Company Of CNBC

For Steve Graso
Stuart Frankel & Its Partners Own (CMCSK)
Stuart Frankel & Its Partners Own (CUBA)
Stuart Frankel & Its Partners Own (GERN)
Stuart Frankel & Its Partners Own (HSPO)
Stuart Frankel & Its Partners Own (NWS.A)
Stuart Frankel & Its Partners Own (NXST)
Stuart Frankel & Its Partners Own (NYX)
Stuart Frankel & Its Partners Own (PDE)
Stuart Frankel & Its Partners Own (PRST)
Stuart Frankel & Its Partners Own (RDC)
Stuart Frankel & Its Partners Own (ROK)
Stuart Frankel & Its Partners Own (TLM)
Stuart Frankel & Its Partners Own (XRX)
Stuart Frankel & Its Partners Own (SDS)
Stuart Frankel & Its Partners Own (TBT)
Stuart Frankel & Its Partners Are Short (QQQQ)
Stuart Frankel & Its Partners Are Short (CL)

For Joe Terranova
Terranova Works For (VRTS)
Terranova Is Chief Market Strategist Of Virtus Investment Partners, Ltd.
Virtus Investment Partners Owns More Than 1% Of (CLB)
Virtus Investment Partners Owns More Than 1% Of (DLR)
Virtus Investment Partners Owns More Than 1% Of (EXR)
Virtus Investment Partners Owns More Than 1% Of (IGE)
Virtus Investment Partners Owns More Than 1% Of (XLY)
Virtus Investment Partners Owns More Than 1% Of (DBC)
Virtus Investment Partners Owns More Than 1% Of (DBV)
Virtus Investment Partners Owns More Than 1% Of (UA)

For Brian Stutland
Stutland Equities Is A Market Maker In VIX, Is Long Volatility

For Jon Najarian
Jon Najarian Owns (AMZN)
Jon Najarian Owns (WMT), Is Short (WMT) Calls

For Robert Stevenson
FPK Or Affiliates May Seek Investment Banking Compesnation From (RYL), (TOL), (DHI), (PHM), (LEN), (KBH) In Next 3 Months


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