Remember the "dangerous breakdown" we noted in Home Depot (HD) shares? It's getting worse…
To recap, we keep Home Depot shares on our watch list for one big reason: It's America's largest chain of home improvement stores… which makes its share price and profits rise and fall along with spending on the American dream. If the Depot's share price is tanking, it's a bad omen.
Driven by the huge government "goosing" of the housing market, HD shares soared off their March 2009 bottom into the mid $30s. But several weeks ago, we highlighted how HD shares broke their uptrend to hit their lowest low in two months. This weakness has come on massive trading volume as traders fled the "housing trade."
On Tuesday, HD continued its horrid summer performance and struck its lowest low in four months. And again, the weakness came on big trading volume. If Home Depot continues this downtrend, it's a strong sign the government goosing is wearing off. We've no doubt the geniuses in Washington, D.C. will order up a fresh boondoggle to fight this trend.
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