Bookkeeping: Selling Almost All Lennar (LEN)

I won't pretend to understand what is going on nowadays in individual stocks - some of the moves are incomprehensible to me. We've been using Lennar (LEN) as a proxy for the (ahem) housing recovery. A few days ago they did a dilutive stock offering to the tune of 20% dilution - the stock fell 20% - mid $7s range. Yesterday issued $400M in notes.

Today? The stock is up over $10. I can't explain it - all I know is it is up 33% in 3 sessions. Today's volume in the stock is nearly 50% of a full day's volume in just under 45 minutes. I am selling all but 100 shares here at $10 and will rebuy on some pullback in the future. My head is spinning from the giddy nature of the magic green shoot recovery.

I assume this report from government is the driver

• Purchases of new homes in the U.S. last month were higher than anticipated, providing further evidence the market may be stabilizing. Sales decreased 0.6 percent to an annual pace of 356,000 after a 358,000 rate in February that was stronger than previously estimated, the Commerce Department said today in Washington.

• Economists forecast new home sales would be unchanged at a 337,000 annual pace, according to the median estimate in a Bloomberg survey of 68 economists. Forecasts ranged from 310,000 to 375,000.

• Sales of new homes were down 31 percent from March 2008. They reached a record 1.389 million in July 2005.

Again stabilization is all that matters now I guess. Even if at record low levels; or down 30% year over year. This is why it is trading environment - the knee jerk reactions to every data point are jaw dropping.

To that end Mohawk Industries (MHK) which makes floor covering (for homes) missed estimates of a 85 cent loss by 70 cents, they lost $1.55. Result? Up nearly 30%. They said they see 'stabilization' in the future. Good luck shorts with anything in this market. Even when your company misses by over 100% you get toasted.

I will repeat this although logic does not matter anymore... yesterday we had existing home sales and today new home sales. As you all know, spring season is the big time for home sales. February is always stronger than January, and March is always stronger than February and so forth. 30 days ago the market screamed in happiness as February sales were higher than January - even though that happens every year. In home sales you need to look YEAR OVER YEAR not MONTH OVER MONTH. Sales in June are always stronger than sales in December for obvious reasons. So finding any strength in one sequential month versus the next makes no sense.

But here is the kicker - despite the Fed driving mortgage rates to lowest rates in history; despite home affordability at highest rates in decades; despite foreclosed homes selling at 50% off, March sales were LOWER than February in BOTH the NEW and EXISTING home figures. Think about that. EVERY year March is better than February and just 30 days we were celebrating that February was better than January. Now March has come in WORSE than February, but we still celebrate?

I only say that to confirm that logic has no place in the stock market in the near term.