The Other Big Three

When you hear investment people talk about the big three, they are usually talking about GM, Ford, and Chrysler. But what about the other big three?

As children, most of us dreamed of having three things when we grew up: a nice house, a nice car, and a nice job. Right now, the outlook for this big three is about as optimistic as the outlook for GM, Ford, and Chrysler.

Over the past year, home values have dropped sharply, auto sales have sunk like a rock, and unemployment has gone through the roof. Before the U.S. economy can turn around, at least one of these markets is going to have to turn higher.

Now that October payroll numbers have been released, it isn’t looking like it’s going to be the job market. October auto sales were just as dismal. The one area that is showing some improvement is housing.

Three recent reports – the August Pending Homes Sales Report, the September Existing Home Sales, and the September New Home Sales – were all slightly better than expected. While the housing market still has a long way to go, the sector could be forming a base.

If you are looking to add to your long-term stock holdings, the Spyders Home Builders ETF (XHB) could be a good buy at this time. Housing may not start shooting up as it did in the early part of this decade, but the homebuilders have reduced their inventory drastically and they look ready to start a nice slow path to the upside.

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Inspired by his high school economics teacher, Rick Pendergraft fell in love with the markets at an early age. He entered his first investing competition at 17, and opened his first brokerage account before he finished college. At the age of 23, on the third options trade he had ever placed, Rick turned $1,800 into $22,000 in less than a week, when the company he bought became the target of a takeover. He admits it was a stroke of luck, but it was a memorable education as to the leverage that options can provide. After a ten year career in banking, Rick decided to pursue trading full-time. To get his foot in the door, he started out in the sales department at Schaeffer's Investment Research. It was not long before his talent was recognized and he was invited to apprentice under Bernie Schaeffer, one of the top options traders in the world. Rick thrived in his new position and twice received the award for "Top Trader."Rick has developed a loyal following of readers who are grateful for his timely warnings and profitable advice. He is widely recognized as a market expert and has been frequently quoted by Reuters, BusinessWeek, Forbes, USA Today, the New York Times, and the Washington Post. Rick's primary focus is on identifying short and intermediate term rising and falling trends in the major market sectors. His analysis is based on technical factors along with indicators of market sentimentRick lives near Delray Beach, FL with his wife and three children.