Many Homebuilders Are Making 52 Week Lows

Beneath the averages there are a lot of stocks that have been clobbered over the last 11 months. Some of the hardest hit apart from gold stocks, the homebuilders. And I have been pretty negative on this sector for a while and we have a lot of homebuilders making 52 week lows this week. Some of these stocks are at 2 year lows, not just 1 year lows!

Related stocks: KB Home (NYSE:KBH), The Ryland Group (RYL), Lennar Corporation (LEN), D.R. Horton, Inc.(NYSE:DHI), M.D.C. Holdings, Inc.(NYSE:MDC)

Peter Schiff is an American businessman, investment broker and financial commentator. Schiff is the CEO and chief global strategist of Euro Pacific Capital Inc.

Investment Outlook: U.S. Economy, Real Estate & Stock Market

If Janet Yellen is true to her word, by the beginning of next year there will be no QE and the Federal Reserve will be closer to pulling the trigger on raising rates. So, I think without all this extra help even if rates are still at zero, people will be preparing for interest rates not to be zero and the Federal Reserve will not be doing all this QE, I don`t think this bubble economy will be nowhere as bubbly.

I believe the real estate market will continue to soften and potentially by then it will be in outright decline in home prices, the stock market could be quite a bit lower if we stay the course between now and the beginning of 2015.

Related trading instruments: iShares Dow Jones US Real Estate (ETF) (IYR), The Ryland Group (RYL), Lennar Corporation (LEN), SPDR S&P 500 Index ETF (SPY), Facebook (FB), Twitter (TWTR), Netflix (NFLX), SPDR S&P Homebuilders (ETF) (XHB)

Peter Schiff is an American businessman, investment broker and financial commentator. Schiff is the CEO and chief global strategist of Euro Pacific Capital Inc.