Housing

It's not a question of when the housing recovery will occur, but how big it will be. I use a couple of classic tells to forecast housing sales and values, and they are flashing bright green, really defying gravity in their obvious way of saying, "Housing's back in 2011." This despite the universal, "Housing's the same mess it has always been" rap, as well as the downbeat projections, mostly from the noisy folks at Zillow, many of which do not reflect the hard macro data kept by other entities.

Look at these breakouts we have seen just this year: WHR, LOW, SHW, PIR, ETH, MAS, SWK and even WSM after that disappointing outlook. That's incredible. These stocks are screaming that sales for homes are going higher and that the value of homes is going higher, or you wouldn't be throwing good money after bad.

Especially ETH, as one does not go shopping at ETH unless you think your home's worth spending on. The stuff's too expensive, much of it now custom, and the sales are amazingly strong. That's good for the $300,000 home cohort. For the $200,000 home cohort, I look at Pier 1, and its sales are the best they have been since the housing boom -- before the bust -- began. Maybe better. Williams-Sonoma's run is harder to pin down, as it is a TIF kind of place. However, its catalogs are a little more downscale. I say the strength reflects good news for all except the lowest-price homeowners and buyers.

Whirlpool's been trying to break out forever, but the housing start numbers have killed it. The WHR move says that housing starts are going to get stronger. I have mixed emotions about that, because I don't want a lot of new inventory, but you have to think that at some point, these homebuilders will want to put up new homes to make money and not just to fulfill credit agreements or, wrongly, try to capitalize on the tax credit stimulus.