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Friday, August 20, 2010

Market Crash - Real Estate Sales - Market News

I periodically post articles about the stock market and home sales which I find interesting.  A number of you have commented that you like the articles because they present points of view that you do not often see in the main stream media.  These stories are not investment advice, but it is always nice to be informed.

The first story tonight is from Zero Hedge and is a follow on to a story I had earlier about the "Hindenburg Omen" -  Word(s) of the Day - Hindenburg Omen - Investment Advice?.  If you didn't read the article, the Hindenburg Omen is a technical analysis pattern that is said to portend a stock market crash. It is named after the Hindenburg disaster of May 6, 1937, during which the German zeppelin Hindenburg was destroyed.  Today Zero Hedge reports:
Longs may be forgiven if they are sweating their long positions over the weekend: not only did we just have a second, and far more solid Hindenburg Omen confirmation today, with 82 new highs, and 94 new lows, but the Saturday is the day when Iran launches its nuclear reactor, and everyone will be very jumpy regarding any piece of news out of the middle east. As for the H.O., the more validations we receive, the greater the confusion in the market, and the greater the possibility for a melt down (or up, as the case may be now that the market is unlike what it has ever been in the past). Furthermore, with implied correlation at record levels (JCJ at around 78), any potential crash will be like never before, as virtually all stocks now go up or down as one, more so than ever before. And should the HFT STOP command take place, the future should be very interesting indeed (at least for the primary dealers, and the Atari consoles which are unable to VWAP dump their holdings in the nano second before stuff goes bidless).

Many are saying the Hindenburg Omen doesn't prove anything.  Frankly I don't know, but in this market anything can happen.

More troublesome is an article from MISH'S about housing sales.
MarketWatch is reporting the consensus for July existing home sales is 4.85 million SAAR (seasonally adjusted annual rate).

And from Dow Jones: Week Ahead
"July existing-home sales ... likely declined 4.3% from June"
June sales were reported as 5.37 million, so a decline of 4.3% would be 5.14 million SAAR.
Note: July existing home sales will be reported next Tuesday.
Housing economist Tom Lawler's preliminary forecast was 3.95 million SAAR (based on a bottom up analysis).
Many of the regional reports showed sales declines of 20% or more from July 2009 when the NAR reported sales of 5.14 million SAAR. A 20% decline from July 2009 would be in the low 4 millions ...
Maybe the MarketWatch and Dow Jones consensus numbers are incorrect (other numbers will be released later today), or there is probably going to be a big miss next Tuesday. Take the WAY under! 
If what Mish reports holds true it should be very bad for the market and home prices.  Not only will the sales number be horrendous but it will be significantly off forecast.
Looks like next week may be a little dicey!

1 comment:

  1. Thanks for the report. I agree there is a lot of bad information out there. We are due for a market correction.