Bookkeeping: A Kool Aid Trade - Adding Homebuilder Exposure with Lennar (LEN)

I don't think real estate is coming back for a few years but it doesn't matter what I think... homebuilder charts firming up and I'm a relative strength guy - this is where money is going, so hence that is where I am going. With both Democrats and Republicans ready to socialize the home ownership market, I have to get some exposure to this area on top of my DR Horton (DHI). Surprisingly the most interesting chart is mass market name Lennar (LEN) - I preferred Ryland (RYL) or Toll Brothers (TOL), but I can add those later - after all the housing market will be booming by the 2nd half of 2008! (ok the real reason is their charts look identical to DR Horton so instead I bought more DHI, instead of adding yet another position)

I am beginning a pretty good sized stake here (I drank a lot of Kool Aid before pressing buy) with a 1.4% initial buy in Lennar around $21. We have a 'double top' formed south of $22 and if we clear that level, I'll buy more... from there we have to deal with the 200 day moving average in the $24s. Once that is cleared? $500! (cough).

Downside? There is none - the US markets are now socialized. As soon will be the housing market. (Do you notice the PPT has futures up every single morning the past 2 weeks?) Get used to it shorts!

I also added more DR Horton (DHI) here in the $16.60s-$16.70s, so together I still only have a 2.5% home builder exposure but even that much scares me when I think of fundamentals... but I have to adjust to the new socialized market where fundamentals don't matter - still working on that - unlearning decade + of equity trading is hard to do in a 4 week period. I still haven't trained myself to plug my nose and plunge into financials - that will take much more work. One step at a time....

Disclosure: the whole house of cards could come tumbling down Friday on the jobs report. Until then? Toga... Toga... Toga...

Long Lennar, DR Horton in fund; no personal position