We cut almost all our Meritage Homes ( ) a week ago Friday, in retrospect about 4 days too early (despite a 25% one week surge), so today's 11% drop does nothing to us, as we have a 0.1% stake. I don't want to rebuy here, because after today's drop it is still above the price we sold. These home builders are extremely volatile and sensitive to news, so the charts are not quite so useful either but here is the current look.

Today, Meritage had earnings and obviously it was not enough to please the Street. It's still performing better than the average bear in the group (remember, MTH is heavy in Texas), but as I keep saying in this new ETF, program trading dominated eta I just don't think individual company metrics mean much anymore. The whole housing group generally moves as one.

Specific to Meritage if you exclude the "1x" (ahem) impairment cost along with the benefit from the extinguishment of debt they only lost $14 million. It's actually a relatively rotten landscape but the way the stock has moved the past few weeks is exactly why we own this. Thankfully fundamentals no longer matter - just keep repeating "Green shoots". With that said, MTH is doing good moves by terminating new developments in Phoenix, and focusing on where the government largess is (for now) - 1st time home buyers. Then once we expand that $8000 tax credit to everyone and move it up to $15,000 - home builders should really fly by the indirect transfer from taxpayers pockets to home builders P&Ls. Free market capitalism baby.

Via Reuters

• Meritage Homes Corp ( ), the 10th largest U.S. home builder, said its second-quarter net loss widened as a result of higher impairment charges and a drop in the number of homes sold.
• The homebuilder reported a net loss of $74 million, or $2.37 per share, compared with a year-ago loss of $23 million million, or 79 cents per share.