The Homebuiders ETF (AMeX: XHB) is starting to fade, signaling a loss of confidence by value investors and bottom fishers.

A rally has to start somewhere. And rallies after long declines are usually spurred by buying from long term value investors who often have a multi-year time frame.

Thus, if such a rally fails after several months it signals that this important segment of Wall Street is losing confidence. And that's what may be happening to the housing segment.

To be sure, it's early since the sector bottomed in December 2007. Yet, XHB has risen some 47% from its bottom, a nice run for a four month stint in this market. And the housing market doesn't seem to be getting any better.

In other words, it's possible that the long term money may be reconsidering and is starting to take money off the table.

A more sobering thought is that this group of investors has decided that since the Fed may have stopped lowering interest rates, any potential recovering for housing may still be a long time away.

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