Sunday, May 26, 2024

Housing Market Improving?

houses-underwater

Contracts for pending sales of previously owned homes unexpectedly rose in February, a survey from the National Association of Realtors showed, a rise the group said may be attributed to home buyers taking advantage of a soon-to-expire tax credit.

The Realtors said its Pending Home Sales Index, based on contracts signed in February, rose 8.2 percent to 97.6 from a downwardly revised 90.2 in January.  (Full Story Here... don't waste your time).

Blah, Blah, Blah... the housing market is improving... let's dance!

mortgage-broker

The media can spin anything into a positive... can't they?  Believe me, the market didn't rally because of the housing data.  Just another bullish Monday... like the last Monday, and the last Monday, and the last Monday (sorry, the record has a scratch in it... let me move the needle)

The volume was only 97 million shares on the SPY today.  Looking back, it looks too be the lightest day in the last 2 years.  Of course with such light volume, I could've pushed the market up with my $6.66 (from selling my dog, kid's and wife last week... to go short with).

Volume volume volume... without it, the money in your piggy bank is enough to rally the market higher.  They should have just closed the market today, if they weren't going to do any trading in it.  Maybe tomorrow will be the start of the coming down move?  It's just a guessing game at this point.

The market will fall when the government wants it to fall... no sooner, no later.  It's really that simple.  Looking back at the chart I posted on the weekend report, we do see that on just about every previous sideways trading range, the market popped higher just before the sell off began.

I thought that Thursday's new high was enough of a pop higher before the selling, but now it seems like it still wants to go a little higher?  Was today's new high enough?  Maybe?  I don't know?  With the 1191-1193 spx level, and the Dow 11,000... just a hair above, it seems destine to go there.

Trying to think like they do is the hard part.  They are most likely trying to figure out what rest of the traders are thinking, so they can fool them and take their money.  So, what does the rest of us retail traders think?  I think most traders are now looking for the 200 ma above, as the next likely target.

And, since every trader has heard the old saying "Sell in May, and Go Away"... that leads me to believe that May will be an up month, which is the opposite of what most people are thinking now.  I also think that most blogs out there are now calling for more UP, mostly saying 1200 plus on the SPX.

Are they going to be right, or will the market fool them?  If they are going to be fooled again, I think it's going to take another "big event" to get the selling started.  What will they stage this time?  When will it be?  Over the coming weekend, or sometime during the current week?  I do feel that they will surprise everyone, and a gap down on some opening day is highly likely.

So for now... we wait patiently for the big surprise to be announced.  Of course if you're not already short, you probably won't get a chance to get in.  You know how they pay that game by now.  I know I've said it before... but we are very very close now.

The Treasury notes rallied up to 4.0 % today... and that's not something the market likes.  A reaction is coming soon.  Remember, looking back at the past 5 times this happened, 2 of the starting days were on a Wednesday, and 2 of the days were on a Friday... with only 1 on a Monday.

That leads me to think that Tuesday will be flat, and if the selling is to start this week... then Wednesday is more likely.   Let's hope the Fed's announce something unwelcome by the market tomorrow, as I'm really tired of this merry-go-around!

Red

Red
Author: Red

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StockObserver
StockObserver
14 years ago

Red:

The 10-day EMA of the CPCE is so low today (http://stockcharts.com/h-sc/ui?s=$CPCE&p=D&yr=1…) that I can't help but think that a market drop is coming soon, definitely before the OPEX next week. What do you think?

Red Dragon Leo
14 years ago
Reply to  StockObserver

I agree… the market looks so ripe to fall before opx. I sure hope it does as I'm short and need the spy below 117 to make any money. I think it will fall to the 111-112 area before opx, and then bounce a little.

Then another fall after opx to 107-108 area, before the summer rally starts back off.

redvetttes
redvetttes
14 years ago

What are the big boys saying,we can'y take profit or it will crash,too much fed money ,I think they push until earning,then lets see.Run oil still have 5 gallons cans to store it in.
I cover today everything,
now it will fall

Red Dragon Leo
14 years ago
Reply to  redvetttes

Did you cover your shorts or longs?

redvetttes
redvetttes
14 years ago

shorts the 3x were killing me

Red Dragon Leo
14 years ago
Reply to  redvetttes

Yeah… I'll never buy any 3x etf again. I'll only go short them, through options, as they all eventually fall to zero.

You can just go short on the bull etf when you think the market is going to fall, or go short on the bear etf if you think the market is going up.

That would be the only way I would do it again.

redvetttes
redvetttes
14 years ago

you here red

Red Dragon Leo
14 years ago
Reply to  redvetttes

Is that a question? Yes, I'm here… although I'm still in broken pieces from the last time I tried to short this market hard.

redvetttes
redvetttes
14 years ago

my large4 stash is in a 401k cant short or option

When this starts to roll I think we will have 3 days of volume swings

Red Dragon Leo
14 years ago
Reply to  redvetttes

Can you go to cash, and then get back in on the long side when we hit 1078 spx area? If you've been reading the blog, then you know why I mention that number.

redvetttes
redvetttes
14 years ago
Reply to  Red Dragon Leo

in cash now 3 day wait on sales,always keep cash on the side

redvetttes
redvetttes
14 years ago

just got to give it time,waiting for xlv to outperform xly

http://stockcharts.com/h-sc/ui?s=XLY:XLV&p=D&b=

I guess its ok till its not or something blows up
watching the 10 year real close, no fear Fed has our back

Red Dragon Leo
14 years ago
Reply to  redvetttes

That looks like it could go higher?

redvetttes
redvetttes
14 years ago
Reply to  Red Dragon Leo

yep ,no fear no volume,we might see what happens in Jan top
4 days of drops and gains

http://stockcharts.com/h-sc/ui?c=$COMPQ,uu%5Bh,a%5D

redvetttes
redvetttes
14 years ago
Reply to  Red Dragon Leo

also see if we start making new highs

http://stockcharts.com/h-sc/ui?s=$NAAD&p=D&yr=0

redvetttes
redvetttes
14 years ago

small caps,see if it can break out over lg.caps

http://stockcharts.com/h-sc/ui?s=IWM:OEF&p=D&yr

Earl of
Earl of
14 years ago

Carl’s morning call:

June S&P E-mini Futures: Today's range estimate is 1173 – 1185. The ES should reach 1200 in April on its way to 1225 or so.

1174.50 -1183.75 actual yesterday (9.25 points)
1177.25 low last night
1173-1185 estimate for today (12 points)
1179 currently, so estimate is -6 to +6 from here (neutral)

monicadern
monicadern
14 years ago

So shocking to see a down day, even a slight one.

sundancer390
sundancer390
14 years ago

on top of the $DJI running into purple contianment on the weekly, it's controlling TL on the daily is providing problems
http://www.flickr.com/photos/47091634@N04/44971

SC
SC
14 years ago

Sorry I am late, but cleaning toilet and flipping burger are demanding hard work.

Situation update:

1. Background : Classic dilemma. Severe adverse market conditions with the runaway train moving again. It is the first week of a new quarter, apparently, the pros are scrambling back into the market. We used to laugh at this kind of chicken shit behavior, ie loading up speculative craps at the beginning of the quarter and selling all the dogs toward the end of the quarter for window dressing. But apparently arguing with (or laughing at) fools does not pay. Never underestimate the power of crowd behavior. Mom is right when she said not to laugh at retards…..

2. Momentum has turned to slightly positive. It is pointing at prolonged topping process. The danger here is missing the blow off rally into the summer. Toward the end of every bubble, it is just relentless, and mindless hysterical mad dash to the cliff. Trendlines, cycles, oscillators, everything get steamrolled over, together with the accounts of all the shorts. Bears looking for a reprieve to get out while bulls looking for a chance to load up. Both go home empty handed.

3. How do you position your portfolio under such madness? Use options.

For example: $100,000 account. SPY May 119 puts @2.55. It will cost 2.27% to go 100% short, and 6.375% to go 300% short. This is a straight put. You can reduce the cost using a spread. What this achieves is that you can go short while limiting your risk to a predetermined level.

If anyone is interested, I will post the details of the strategy. Otherwise I need to rest up for my nightshifts…..

gcocks83
gcocks83
14 years ago
Reply to  SC

SC, I hope you wash your hands before cleaning the toilets after cooking those greasy burgers. I would love to hear more of your strategy. I am in cash for the time being and have traded options on a limited basis. I am only using a 3x etf for a day trade.

dreadwin
14 years ago

As I write this, USO (oil) is -0.45% while $SPX is +0.05%. The $USD seems to have stopped (or at least suspended) falling, and is rising. I think this will cause at least a pause in the ramp-up, if not a reversal.

dreadwin
14 years ago
Reply to  dreadwin

Naturally, less than one hour later, a brutal short squeeze has sent the markets to new highs on $SPX. Oil, however, has not confirmed this new high.

The Fly
The Fly
14 years ago
Reply to  dreadwin

OIH is up

Earl of
Earl of
14 years ago

Carl hasn't traded yet today.

He is just now calling for /ES to drop to the 1170 area. He used the word imminent.

/ES futures peaked (so far) today at 1188, 3 points above Carl's project high for the day. 1170 would be 3 points below his projected low for the day.

The Fly
The Fly
14 years ago
Reply to  Earl of

No way. This market is so Fed fueled – it will not go down until there is some huge unforseen event.

monicadern
monicadern
14 years ago
Reply to  The Fly

That's what they want you to think.

monicadern
monicadern
14 years ago
Reply to  Earl of

Carl is definitely on the inside.

Earl of
Earl of
14 years ago
Reply to  monicadern

Monica, I hope he is right. I have some TZA that needs a little help.

monicadern
monicadern
14 years ago
Reply to  Earl of

I have confidence that he is. Don't worry Earl of, you are not nearly as bad off as me. If the market doesn't go down today, just get out of your position.

Earl of
Earl of
14 years ago
Reply to  monicadern

I have 3% stops today. If they hit, they hit. I figure Carl's target of 1170 (only 15 points down from here) might happen tomorrow, so I'll give it that much time before bailing.

monicadern
monicadern
14 years ago
Reply to  Earl of

Yes, probably wise.

dreadwin
14 years ago
Reply to  Earl of

Last week, I sold my DRV for 8.73 (a tiny profit). 2 days later, I was kicking myself because it ramped up to 9.01. If we really are near a top, DRV should put in a doji very soon with a long tail. We have step one of a bollinger band sell signal in place on $RMZ. Tomorrow, we need to see a close inside the upper BB, and the following day we need a lower close than tomorrow. I expect a long tailed doji tomorrow in DRV followed by a reversal.

Earl of
Earl of
14 years ago
Reply to  dreadwin

I'm playing the weekly BUY-IF signal buying some DRV every day this week. So far, I just want to throw up. The good news is I'm playing this pretty small.

IYR looks like it just broke out of a congested area, and could run for a while. Bothersome.

dreadwin
14 years ago
Reply to  Earl of

IYR flips out and kills people (i.e. goes up) when $TNX makes a “run”. If the Fed can contain $TNX, look for IYR to crater.

monicadern
monicadern
14 years ago

Unbelievable this market is. I sound like Yoda.

monicadern
monicadern
14 years ago
Reply to  monicadern

All I can say is that we have reached 1191. Will it mean anything? I guess we have to wait and see.

Red Dragon Leo
14 years ago

Well… we got our 1191.80 on the spx. Now would someone punch this market in the face… and break it's nose while you're at it! Then kick him while he's down too!

THe Fly
THe Fly
14 years ago
Reply to  Red Dragon Leo

Dragon, you should go play 'Dreamer' by SuperTramp

Red Dragon Leo
14 years ago
Reply to  THe Fly

Yes… it's true, I'm a big dreamer. But I thought I could count a few off you guys (and gals) to help me tackle the bulls. I guess I'll have to go at it alone…

monicadern
monicadern
14 years ago
Reply to  Red Dragon Leo

I would help you but I have already been tackled and mamed by the bulls 🙂

monicadern
monicadern
14 years ago
Reply to  Red Dragon Leo

Red, since you run this blog, that is your job!

sundancer390
sundancer390
14 years ago

today has been a real interesting day playing with probabilities of the current $SPX setup
The last time we had probabilities like this on the $SPX weekly was back during the 7/16/2007 week

for those that have been around this rodeo remember back in july 07' the massive bullgasm going on. The week following 7.16.2007 the operators debased the $SPX 4.9%. Took out 14 weeks of gains in 1 week.

Now digging deeper to try and find the co-relational ritual (1:1).

$SPX 07' (min:max) 1363.98 : 1555.9 = 14.07%
$SPX 10' (min:max) 1044.50 : 1191.8 = 14.10%

as we know from 07' the summer debasement was the final before the blow-off into the fall, the operators told us last week $DJI 11,816 will be the terminal de-leverage pt.
http://www.flickr.com/photos/47091634@N04/44783

and to add more fuel to the fire, $SPX printed 1191 that i was looking for as it is where purple contianment is on the weekly
http://www.flickr.com/photos/47091634@N04/44905

monicadern
monicadern
14 years ago
Reply to  sundancer390

Thanks Sundancer. Hopefully the 1191.8 holds. Really appreciate your input.

sundancer390
sundancer390
14 years ago
Reply to  sundancer390

here's a chart of the local (min : max)
http://www.flickr.com/photos/47091634@N04/44974

sundancer390
sundancer390
14 years ago
Reply to  sundancer390

the summer 07' debasement local max : min = 11.9% (9.11) co-relational to $SPX 1191

monicadern
monicadern
14 years ago
Reply to  sundancer390

Interesting – from my horrid math skills I calculate that if the same relationship were to hold from here, we would reach around 1067 which is similar to the SPY number you have mentioned (I think). 9/11 – hmmm.

sundancer390
sundancer390
14 years ago
Reply to  monicadern

co-relational 11.9% off 1191.80 = 1049.98

it's 9.54% to the de-leverage pt. of 1078, which makes perfect sense as it gives the operators a 30 pt. range to acquire new inventory into the 1049.98 area

once the debasement takes out 10% the mind controlled fools will beLIEve the top is in are go all in short right @ the bottom

monicadern
monicadern
14 years ago
Reply to  sundancer390

OK, so my math really does suck! So you are saying you think it gets to the 1050 area then? I thought de-leverage meant stopping point? Thank goodness you have saved us from going short there.

Red Dragon Leo
14 years ago
Reply to  monicadern

Monica, if you remember from the last major fake print back in January… it was 1047.28, but the low was actually 1044.50 spx. So, that means that once momentum is going strong to the downside, it will be tougher to stop right at that level.

So, the harder and fastest (with large volume) that it is going, when it reaches 1078, the further it will pierce it before reversing.

Although, that 1050 area is a stretch, but that could be possible on a lot of selling pressure.

monicadern
monicadern
14 years ago
Reply to  Red Dragon Leo

Thanks Red – now I just have to cross my fingers 🙂

AS2009
AS2009
14 years ago
Reply to  sundancer390

Sundancer – am fascinated by your work – however not sure I understand everything — could u pls share some basics on what you mean by:

– Max containment and how you get those lines
– Debasement – assuming you mean a fall coming, but can you explain what you think it is …

Red – love your blog – crazy busy at work, so just haven't been posting as much – love your posts !!!

sundancer390
sundancer390
14 years ago
Reply to  AS2009

Hi

the lines you see on my charts are Moving Averages in sequences of 8.

Max contain is just a term I use to describe the Teal line in all my charts.

Debasements are when speculative capital is harvested. The coming debasement will @ a minimum print 1078 $SPX and final terminal pt. between 1049.98 & 1078.

AS2009
AS2009
14 years ago
Reply to  sundancer390

Got it – thanks 🙂

So how do you get the teal line and price points for debasements ?

Also, what are de-leverage points ?

Thanks for sharing 🙂

monicadern
monicadern
14 years ago

Well, if the pattern does repeat, it looks like we will have one more high before the big plunge. Scary thing though is that if we really do repeat, that big plunge would eventually take us to DJIA 3000 or so. Meanwhile, I like that big red candle between now and that new high. Maybe Red is right that big falls can only come on MWF.

Earl of
Earl of
14 years ago

Carl at day’s end:

1173-1185 estimate for today (12 points)
1178.25 -1188 actual today (9.75 points)
Carl was a bit low today again today

Trades: no trades today

Grade: C didn’t lose any money

Earl of
Earl of
14 years ago

TNA opened down 1.1%. Yesterday’s gap from $55.95 to $56.03 was not filled. Today’s gap was filled. TNA was up 2.3% at the high, and closed up 1.6%.

We are now in a Full Moon Trade, which tends to favor TNA.
AmericanBulls has TNA with a Confirmed Buy signal yesterday. This trade bought TNA at $56.50, and closed today at $60.13, up 6.4%.

Volume for TNA today was about average for the past 6 days, but low compared to the average of the past 20 days.

$RVX (VIX for $RUT) was down 1.7 % today with TNA up 1.6%. No divergence.

TNA has now been up 5 of the last 9 days. Chop generally, but today added to yesterday’s breakout. Good for TNA.

The high for TNA today was $60.56, the highest TNA price since November of 2008.

Ultimate Oscillator for TNA rose from 47 to 56 today. Until today, UO has been below 50 five of the last seven days. Indicates strength for TNA. Good for TNA.

MACD on the monthly chart crossed over downwards seven days ago, but has moved back up and may cross over to the upside tomorrow. Good for TNA.

Bollinger Bands for $RVX (VIX for $RUT): today’s black candle crossed below the lower Bollinger band and closed above that band. MACD seems to be topping. Looks like $RVX might rise tomorrow. Bad for TNA.

Bollinger Bands for $RUT: The entire body of the white candle for $RUT was above the top Bollinger Band. Just like yesterday, it looks like $RUT may have topped, but need to watch tomorrow for confirmation. MACD has crossed down, but may be working back up. Unclear.

Bollinger Bands for $RUT:$RVX ($RUT vs VIX for $RUT): today’s white candle closed above the upper Bollinger Band. The upper Bollinger Band is flat. Looks like we are near a top for $RUT. Bad for TNA, but maybe not right away.

TNA had a higher high, higher low and higher close – Good for TNA.

Money flow for the Total Stock Market was $1,003 million flowing out of the market. Bearish – Bad for TNA.

I will post the AmericanBulls candlestick interpretation a bit later.

Overall, it looks bad for TNA soon, perhaps tomorrow.

traderjohn
traderjohn
14 years ago

Mole put up an interesting post below , must read

http://slopeofhope.com/2010/04/caveat-tauri.htm

monicadern
monicadern
14 years ago
Reply to  traderjohn

Thanks Traderjohn. I always find this ratio interesting.

Earl of
Earl of
14 years ago

The Daily view from Americanbulls

TNA went from highly reliable BUY-IF signal, to confirmed BUY, and today is a hold. The TNA buy was at $56.50. TNA closed at $60.11, up 6.4% since the buy.

The candlestick today White Candlestick (normal buying pressure).

TZA today has a highly reliable SELL-IF. Yesterday, it was a hold, down 7.1%. The buy price was $7.04. TZA closed today at $6.46, down 8.2% since the buy. The candlestick today was a Black Candlestick (normal selling pressure). The last three candlesticks formed a highly reliable Bearish Three Outside Down Pattern.

Two recent TZA Buy signals have failed and may perhaps serve as a warning:
Buy at $7.33, sell at $7.14
Buy at $7.11, sell at $7.05
Buy at $7.04, now down 8.2%

For that matter, recent TNA Buy signals (until this last one) have also been uninspiring:
Buy at $55.36, sell at $55.43
Buy at $55.69, sell at $55.63
Buy at $56.50, up 6.4%

Summary of $RUT based ETFs & a few popular ETFs (Market positive):
Wait: DRV(-3x), SRS(-2x), RWM(-1x), TWM(-2x)
Hold: DRN(3x, up 12.9%), DIA(up 0.65%), QQQQ(up 0.8%), IWM(1x, up 2.4%), UWM(2x, up 5.3%), TNA(3x, up 6.4%)
New Confirmed Buy: URE(2x), IYR(1x)

Market Transition:
Highly Reliable SELL-IF: TZA (-3x, down 6.6% )

Market Negative:
Wait: SPY
Hold: DTO(-2x oil, down 15.24%)

Comment: simply astounding that DTO remains a hold here, down 15%.

Comment: market more positive than yesterday, 3rd day in a row
Action for tomorrow: Possible Sell of TZA

gcocks83
gcocks83
14 years ago
Reply to  Earl of

Hi Earl, Appreciate the post.

redvetttes
redvetttes
14 years ago
Reply to  Earl of

somebody bought 3000 tza $9.00 apr.calls @ .01
any takes
$7.00 calls are .04
Longshot time ?

gcocks83
gcocks83
14 years ago
Reply to  redvetttes

Thanks Redvette, that is quit interesting.

Earl of
Earl of
14 years ago
Reply to  redvetttes

If someone can remember to check this later, it would be interesting to see how these calls fare.

I don't do options, but it sounds like a $3,000 lottery ticket.

Red Dragon Leo
14 years ago

Does anyone have a fake print on BIDU, on the daily chart? It shows 628.50 as a high on 03-15-2010…

http://reddragonleo.com/wp-content/uploads/2010

sundancer390
sundancer390
14 years ago
Reply to  Red Dragon Leo

yeah I'm showing it

that 628.50 is co-relational to it's ENV 21,21,21 which was 628.72 on that day.

sundancer390
sundancer390
14 years ago

yeah I'm showing it

that 628.50 is co-relational to it's ENV 21,21,21 which was 628.72 on that day.

sundancer390
sundancer390
14 years ago

Hi

the lines you see on my charts are Moving Averages in sequences of 8.

Max contain is just a term I use to describe the Teal line in all my charts.

Debasements are when speculative capital is harvested. The coming debasement will @ a minimum print 1078 $SPX and final terminal pt. between 1049.98 & 1078.

AS2009
AS2009
14 years ago

Got it – thanks 🙂

So how do you get the teal line and price points for debasements ?

Also, what are de-leverage points ?

Thanks for sharing 🙂

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