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Housing Market Crash Incoming!Demand always rules supply. Always. BLUF: Short-term projection = TBD Mid-term projection = bullish Long-term projection = bearish to extremely bearish Traders, I have been quick to point out the tremendous amount of disinflationary data in my videos which leads CPI reports in some cases by as much as 6 months (i.e. -rent). Now, let's take a closer look at the NAHB's Housing Market Index data which helps us to better denote market sentiment. First, observe that we have entered well below the weak demand zone. This is generally an area in which we can notice softening demand. Though the housing market may still remain hot in certain cities, others have noted softening demand. Once we dive below this "Weakening Demand Zone", it can often represent the beginning of a housing market recession, or, in the case of the 2008 era, a crash! We began this crash with certain city markets plummeting through this weakening demand zone, Detroit comes to mind along with a few others. These were our lead cities to watch at the time. At the point in which weakness in these markets began to be acknowledged and reported, it was already too late. Michael Bury (aka - The Big Short) knew this. The crash had begun. The markets did not react immediately, as we all know. In fact, the opposite: it would be a full 17 months before the stock markets reached their tops and then crashed hard. In a similar fashion, the Fed was notoriously tardy in recognizing lead disinflationary indicators and reducing rates accordingly. Not until a full year and two months AFTER the housing demand fell below its weakening zone would the Fed jump in and begin to diminish rates. By then it was too late. Fast forward to 2022. Despite the fact that our U.S. housing demand has fallen far below the weakening demand zone and below the approximate median for a housing crash start, the Fed continues to raise rates at a historic record pace. These rate hikes will come home to roost eventually, but not immediately. This is why I am under the persuasion that we WILL enter a more disastrous recession or worse in 2023. The lag effect of the Fed rate hikes will have a significant consequential impact. Just as in our past housing market crash story the impact will be significantly delayed and by the time they are noticeably felt, it will be far too late. Disinflationary data, low demand, low consumer sentiment, etc., will have hit us harder far in advance and the Fed will have realized they should have pivoted sooner. Though my longer-term outlook appears rather dismal at the onset, my mid-term outlook may be rather surprising to many. I do believe that just as occurred before the 2007-2008 market crash, the preceding price action will become bullish. It took the market a full 17 months to recognize the significance of our housing data, and the fed wasn't much better. Will it be any better this time around? It might be, but as we can learn from history, the market collective and the fed are often irrational and reactionary. The case for my blowoff top past the previous year's November highs still stands. The market will begin to recognize and digest more and more disinflationary data not least of which is housing market demand. The Fed will begin to be pressured more and more to pivot. And whether due to pressure or reason, I believe they will pause or pivot soon. Then the meltup (aka blowoff top) will begin. And sometime mid to late 2023, it all ends. Secular bull market (since 2009) exited. Secular bear market entered. Be ready my friends! And pray that I am wrong! Stew
ECONOMICS:USHMIShort
by stewdamus
2
$TTRE - CAD RE - Falling $RY $TD $CM $BNSIt was drawing the same line from the peak in April 2007 to Nov 2008 housing bottom. We could be looking at a similar turn of events, but again, I think it should be accelerated. (The amount of debt as the reason) If this comparison carries similarly, it is 16 months from the peak in Feb 2022 to August 2023. We'll see... I do think Power of Sales are starting to hit the market now as banks move in to try and cut losses as quickly as possible. I moved the 2023 low to align with a similar set of events as 2008.
TSX:TTREShort
by rwoods187
BTC, DXY, S&P500, QQQ, HOUSING, Volatility is back - WRECKTEMBER (BTC) After 54 days of the uptrend from the lows the 18 June at $17,6k, going up to $25,1k, for a 42% gain in the middle of a bear market, the bull trap has been confirmed with a downtrend of 22% the day I am writing this in 22 days! The Short BTC target in this downtrend is $18,3k it probably won't hold and re-test the 18 June lows at $17,6k for either make a double bottom or break and go straight to $13,5k; who is the Fibonacci speed resistance fan 0,75 line, whose during the last bear market BTC touch three times during 1year, before his last halving. (DXY) The USD dollar is sitting on a 16-year resistance trend line, forming a double top from the 14 July high at 109,2$, drawing a rising wedge and making it bearish. The rising wedge is not confirmed until it breaks 107 to 105 on the downside. (QQQ and S&P 500) QQQ = -12% from the latest high this summer is sitting on the Fibonacci retracement 0.236 at 293$ S&P 500 = -9% from the latest high this summer is sitting on the fibonacci retracement 0.236 at 3916$ A rebound is expected for both in the short term due to the Fibonacci resistance and the DXY possibly dropping, but new lows are expected in the long term due to the macroeconomy in the US, China and EU. UNITED STATES NEW HOME SALES have dropped to -50% from $1 million to $511k in 2 years. The last time this happened was during the crisis in 2007-2008, and it dropped to -81% in 5 years, meaning that it is probably just the beginning of the housing market crash. www.census.gov Not Financial Advice
INDEX:BTCUSD
by kelman971
Housing & Lumber Says SPX to New ATHLumber is a leading indicator for the housing market which is a leading indicator for the economy. In fact, as you can see on the chart, they are usually TOO leading. Housing Index needs lumber to confirm down trend via at least one failed retest of its ATH before it can establish its own top. After housing peaks, It takes a while before the stock market peaks, except during black swan events like Covid of course. But anyone hoping for a black swan event to tank the markets is relying far more on Prayers & Doomium than data.
SP:SPXLong
by Indotermes
Monthly Supply of HousesWill history repeat itself? Is it time to call Ben Rickert, Jared and Vinny. What would those guys think about it? Any other time the houses supply was this high it was considered a recession. I know what you’re thinking. Defaults are what caused the GFC. Loan Defaults? Delinquency rate bubbles are a result of higher interest rates and tight monetary and fiscal policy all of which are just now appearing. The sudden increase in rates may be too quick of a shock to the system. Who knows what other bubbles await. There may be enough stimulus to keep it going a little while longer. Could government spending be the bubble. The real problems start when a negative wealth effect from falling home prices and high interest rates cause a tsunami of foreclosures. Inflation isn’t going away and that means rates are here to stay.
FRED:MSACSR
by SPYvsGME
4
What is causing a 14% decline in MBS?What is a Mortgage Backed Security? A Mortgage Backed Security are shares of a Special Purpose Entity (SPE) that holds mortgages. Whenever someone buys a home they usually purchase it with a mortgage. Investment Banks (underwriters) put up the capital and create a mortgage agreement with the home owner. Banks don’t want to carry the risk of mortgages defaulting so they create a corporation for offloading the risk. The corporation is called a Special Purpose Equity (SPE). The role of an SPE is to issue shares of the corporation for investors to buy called Mortgage Backed Securities (MBS). Investors in the Mortgage Backed Securities take on the risk for a dividend/yield. What is causing a 14% decline in MBS? Back in 2007-2009 was the global financial crisis (GFC) as a result of mis-management of MBS industry that sent the world economies in recession and markets declined. The problem started much earlier leading up to 2005 as new homes were being built and sold at highest levels 1972. Lenders were essentially giving special promotional rates to any buyers with a pulse called sub-prime. When these sub-prime mortgages began to default it caused a cascading effect to the entire housing industry. Today is different, but we may only see the tip of the iceberg. The Fed began buying and holding MBS after the decline in 2008 and currently holds in the tune of 2.7 Trillion in MBS. The Fed has started a cycle of tightening and in September will begin unloading their MBS. New housing starts are down as a result of higher interest rates rising and inflation in commodities like lumber. Volatility in lumber prices were the first to indicate problems over the last 2 years as prices of lumber fluctuated drastically because of problems with supply and demand.
Editors' picks
NASDAQ:MBB
by SPYvsGME
27
Chinese Real Estate Large Cap IndexThis is an updated version of my previous "Evergrande + others" chart of Chinese real estate. Instead of including some smaller companies with longer price history, this focuses on large market cap companies. I weighted the prices against each other equally by their 42 day average, and then weighted that by the market cap: 1. Sun Hung Kai Properties (0016) HKD 268.5 billion -2.06% Sun Hung Kai Properties Limited develops and invests in properties for sale and rent in Hong Kong, Mainland China, and internationally. It...See Company Profile HKD 2. China Overseas Land & Investment (0688) HKD 252.28 billion 24.86% China Overseas Land & Investment Limited, an investment holding company, engages in the property development and investment, and treasury...See Company Profile HKD 3. China Resources Land (1109) HKD 245.3 billion 4.88% China Resources Land Limited, an investment holding company, invests, develops, manages, and sells properties in the Peoples Republic of China....See Company Profile HKD 4. China Vanke Co. (2202) HKD 235.54 billion -11.14% China Vanke Co., Ltd., a real-estate company, develops and sells properties in the Peoples Republic of China. The company operates through...See Company Profile HKD 5. CK Asset (1113) HKD 202.95 billion 13.53% CK Asset Holdings Limited operates as a property developer in Hong Kong, the Mainland, Singapore, the United Kingdom, continental Europe,...See Company Profile HKD 6. Longfor (0960) HKD 177.07 billion -20.57% Longfor Group Holdings Limited, an investment holding company, engages in property development, investment, and management businesses in China....See Company Profile HKD 7. Sino Land Co. (0083) HKD 91.07 billion 21.52% Sino Land Company Limited, an investment holding company, invests in, develops, manages, and trades in properties. It operates through six...See Company Profile HKD 8. Country Garden Co. (2007) HKD 80.22 billion -49.28% Country Garden Holdings Company Limited, an investment holding company, invests, develops, and constructs real estae properties primarily in...See Company Profile HKD 9. Greentown China (3900) HKD 40.51 billion 28.98% Greentown China Holdings Limited, an investment holding company, engages in the property development and related business in China. It operates...See Company Profile HKD 10. Yuexiu Property Co. (0123) HKD 29.82 billion 40 .17% Yuexiu Property Company Limited, together with its subsidiaries, develops, sells, and manages properties primarily in Mainland China and Hong...See Company Profile HKD source: fknol.com (Unfortunately they no longer sort by market cap by default. To view it you'll have to sign up for fknol's terrible website.) Here was the logic I used: 'a' = 42 day price average. 'b' = adjust b based on the market cap. if the market cap is larger, c gets smaller, market cap smaller, c larger. Market....a=42D_AVG.....b=a/Market_Cap_Billions --------------------------------------------------------------------------------------------- 0016.......94.14................0.3506 0688.......21.49................0.08518 1109.......35.14................0.1433 2202.......18.51................0.07858 1113.......51.73................0.2549 0960.......37.36................0.211 0083.......0.3542..............0.003889 2007.......5.662................0.07058 3900.......13.34................0.3293 0123.......0.09548............0.003202 (I had to fill in the table with dots so it would show correctly.) Now, for each row, take each market and divide by 'b': 'market1'/b1 + 'market2'/b2 + ... : '0016'/0.3506+'0688'/0.08518+'1109'/0.1433+'2202'/0.07858+'1113'/0.2549+'0960'/0.211+'0083'/0.003889+'2007'/0.07058+'3900'/0.3293+'0123'/0.003202 You can also exclude the second column, skip computing 'b', and instead divide the price by 'a' and you would have a 42 day average price weighted index. Dividing a price by an average would normalize it near 1, weighting each price equally. Does it make sense? Thanks for taking a look! Misc. Analysis: Total valuation, going by the info, is roughly 1623.26 billion HKD , which is ~200 billion USD. This is not an unusually large amount, but the importance of these companies is far beyond their numerical market cap. Chinese citizens and companies purchase properties around the world, so I think this price action goes hand in hand with global real estate, possibly with this index as a leading indicator. A large global surplus of buyers in the last few decades has pushed real estate prices everywhere to unreasonable levels and now there is a deficit of buyers. Any serious bailout will distort prices and at some point it's possible that the price action becomes useless. The CCP owns a piece of every company already so I think this would be the more probable route. Good luck and don't forget to hedge your bets!
Editors' picks
0Education
by fringe_chartist
11
Chinese Real Estate -8% TodayJust FYI, an equally price-weighted basket of large Chinese real estate companies is down 8% today. Rumor is going around lots of companies in this sector are not paying interest payments and are on the verge of default. Maybe it could spill over into global markets? Dare I say it could be an outbreak in the market flu? These companies are much larger than Enron. Evergrande (HKEX:3333) by itself has 120,000 employees, about 6 times as many as Enron had. Maybe something to think about. Here is the symbol if you want to view it yourself: '1918'/2.912+'0960'/2.862+'2202'/2.623+'2777'/1.112+'3333'/1.527+'2007' I hope this was somehow useful. Good luck and don't forget to hedge your bets!
HKEX:1918
by fringe_chartist
8
Housing Market Boom / Crash Statistical AnalysisHousing market's median home value (for new homes) peaked 2 months ago at $457k. Total growth leading up to that point over the last 59 years, since 1963, was $439.3k. The last two years accounts for a significant portion of all growth, while the last two growth periods displayed more growth than all of which occurred during the 44 year period between 1963 and 2007 12.4% of all growth has been lost in the last 61 days, or 37% of what was gained in the last 2 years. Following the bailouts in 2008 we began to see recovery across markets, but starting around 2010 an exaggerated period of growth began. After the covid pandemic flash crash, that exaggerated growth skyrocketed, leading to an unsustainable market economy, especially in housing. The losses we've seen over the last 61 days may indicate the beginnings of an extended period of severe loss if markets are left to correct naturally, if not artificially bailed out yet again.
FRED:MSPNHSUSShort
by dudebruhwhoa
1
The Next Housing Crash will be Catastrophic - Prepare Now!American and international corporations are keeping a large number of properties off the market as investments. These unoccupied flats limit supply in sought locations, creating an artificial scarcity as a result of central bank policies that finally caused an Everything Bubble. The number of corporate purchases of houses has increased dramatically. This has fueled demand in market, but if rental income fall as a result of the recession, corporate purchasers will start liquidating those same assets. As mortgage rates are rising, people are having a difficult time to allocate their income towards mortgage payments especially in times where rising food inflation is also a major problem for majority of Americans and if unemployment rates goes slightly higher then mortgage default will occur on a national scale, leading to another catastrophic housing crisis. In one of our previous analysis we stated, how inflation will peak at 12% and in case of a recession it is certain that inflation will stay on it's trajectory to peak while, Home prices will start correcting. Demand and Supply comparison between U.S Population growth and overall Nonfarm payroll employees against total housing unit supply Listing count of houses actively on sale have increased significantly in June by 18.74% According to the MBA's Refinance Mortgage Applications Index, applications for mortgages refinance fell 5.7% in June and have fallen by 70% year on year to the lowest level since 2000. PPI for Construction material have increased by almost 50% since 2021, forcing builders to shrink margins by 10-12% Conclusion: Since owning a home is becoming increasingly costly, it is prudent to rent one because real estate prices will soon begin to correct. NOTE: Cost of Farmland which have adequate water supply will continue rising due to current geopolitical situation. To leave this analysis on a positive note, We have picked an undervalued stock for you, Unity Software Inc. (NYSE:U) Looking at the future, their is one aggressive company that should be in every tech growth investor's portfolio which have the potential to outpace market, Unity Game engine can render ultra-realistic graphics, The next decade will of The uncanny valley and unity software plays a major role in it, Unity software are down 70% this year and trading 40% below their IPO value, The stock is currently at discount and from a long-term prospective and we believe that it will provide 80% return within 24 months making it a best buying opportunity. To this wonderful community, Be safe and be prepared, Thank you. ❤️
ECONOMICS:USCSHPI
by EQTSHARES
4
Home Depot Tries to Break Out Before Housing DataHome Depot could be attempting a breakout as investors await key industry data. The main patterns on today’s chart are the falling trendline and the 50-day simple moving average (SMA). HD is attempting to push through both. This is especially interesting because TradeStation data shows fewer than one-third of S&P 500 companies are above their 50-day SMAs. The fact HD remains above it shows the stock has spent more time bottoming than the broader market. Next, MACD has been made higher lows for months as the stock made new lows. That’s a potential case of bullish divergence. The 8-day exponential moving average (EMA) is also above the 21-day EMA. Next, consider how the DIY giant has reacted to quarterly results this year. It tanked in February despite beating estimates. It tried to rally on strong numbers in May, but couldn’t get above the 50-day SMA. Such weakness isn’t a surprise considering market sentiment toward interest rates. But with that worry fading in the past month, will price react differently in the second half? Traders could find out as early as this week, which features NAHB’s housing market index on Monday and housing starts/building permits on Tuesday. HD’s next quarterly results are due August 16. TradeStation has, for decades, advanced the trading industry, providing access to stocks, options, futures and cryptocurrencies. See our Overview for more. Important Information TradeStation Securities, Inc., TradeStation Crypto, Inc., and TradeStation Technologies, Inc. are each wholly owned subsidiaries of TradeStation Group, Inc., all operating, and providing products and services, under the TradeStation brand and trademark. You Can Trade, Inc. is also a wholly owned subsidiary of TradeStation Group, Inc., operating under its own brand and trademarks. TradeStation Crypto, Inc. offers to self-directed investors and traders cryptocurrency brokerage services. It is neither licensed with the SEC or the CFTC nor is it a Member of NFA. When applying for, or purchasing, accounts, subscriptions, products, and services, it is important that you know which company you will be dealing with. Please click here for further important information explaining what this means. This content is for informational and educational purposes only. This is not a recommendation regarding any investment or investment strategy. Any opinions expressed herein are those of the author and do not represent the views or opinions of TradeStation or any of its affiliates. Investing involves risks. Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options, futures, or digital assets); therefore, you should not invest or risk money that you cannot afford to lose. Before trading any asset class, first read the relevant risk disclosure statements on the Important Documents page, found here: www.tradestation.com .
NYSE:HD
by TradeStation
Timing The Housing Market, Patterns Always (Win / Win Strategy)For over 2 years we've heavily referenced the NAIL ETF ( Provided by Direxion ) to get a better sense of the overall housing market. As a measure of context, our experience / trading background included heavy exposure in supporting MBS (Mortgage Backed Securities) and ABS (Asset Backed Securities) reference data providers. This is in no-way investment advice. Needless to say, that with the right view, this particular security has been a pretty strong indicator on how the general housing and construction market will perform both in the short and long term. One question that we are constantly asked, is whether the support price has already been reached. Well, historically speaking the support price hovers around US$20 and then bounces to over US$95. As part of our general methodology, we focus on generating a high volume of trades with automation, this allows for compounded returns (huge fan of pyramiding). So, buying at the support price, could well be one long-term strategy once the price reaches the US$20 support (if one can manage the stress associated with short-term risk), should the price drop even further one could increase the position to average down for a more preferable price. On the other hand, we recommend that traders consider using two timeframes of reference for a guide on support and resistance levels. As an example, one could look at the long-term trend with 2–4-hour candlesticks across a large volume of ticks and then move to a shorter time-frame (such as the 15-minute candles) once a direction is established, to focus on directionally advantageous positions (either bullish or bearish outlook). This allows a swing-trader to remain in a position during times of volatility with a strong resolve based on back-tests that the future outcome will have some predictability. The reason for this post is that we find that many "newly minted" retail swing-traders are focused on the short-term gain and tend to have stop-losses triggered fairly quickly. If one where to consider the approach above, a more loosely defined (%) stop-limit would allow for improved returns contingent on one using the long-term outlook as a guide. Final Thoughts Regardless of your strategy, we recommend one always trades with stop-limits and profit targets (this can be established with the tradingview strategy-tester), and more importantly focus on consistency. There is no such thing as a silver bullet, but historical trends on etfs certainly do help with timing.
AMEX:NAILLong
by UltraAlgo
4
Cardano - Updated Charting 06/02 with Bottom Target Buying Zone Cardano enjoys a sweet dead cat bounce before moving further down finishing wave 5 (.30-.10) before moving upward towards ATH. Headwinds to take into consideration BEFORE investing in what they identify as risk on investments: Jamie Dimon's Hurricane Comment: www.cnbc.com (People should take not coming from Jamie, potential significant heads up) Latest ISM Report (May 2022) BULLISH FOWARD GROWTH: www.ismworld.org April Jobless Claims in at 200K (Extremely low) : www.cnbc.com Latest PPI Report (April) 11% www.bls.gov Latest CPI Report (April) 8.3% www.bls.gov DXY: Upward momentum since 07/2021 (Up 17.29% from 89.47 - 103.57 (Trending now around 101-102.xx) Ukraine War Crude Prices: Macrotrends Covid / Monkey Pox / Viral flavor of the month (Fear Tactics) Supply Chain Challenges Manufactured slowdowns of goods...for example China closing key manufacturing plants in an attempt to retain pricing power. Continued FALLING YEN! (Danger Zone) BTC.D Dominance! (46.78% Currently) Up from 39.26% in Jan 2022 Housing: Who would have EVER thought the CURE of the housing shortage was higher interest rates. By some sort of miracle, there's no longer a shortage! www.thetitlereport.com *** CAUTION *** There are significant CRACKS in housing, especially in those areas that enjoyed MASSIVE double-digit gains in most recent years. Looking for WALL ST corps to dump asset inventories as to not carry negative appreciative assets on their balance sheets. 1 out of 5 homes on the market currently has price reductions already. Look for significant additions of inventory VERY soon as even more people are priced out and corporate landlords like BlackRock will be looking to offset their portfolios not gain. The FED also looking to sell MBS (Mortgage Backed Securities) instead of buying them, will force lenders to keep more mortgages on their balance sheets (They are already adjusting for tightening lending requirements. REFI markets with even higher interest rates are almost completely DEAD. Mortgage companies have already begun restructuring (layoffs) of many mortgage personnel. Looking for a 40-50% reduction in housing prices (Generally speaking, go back to 2016 / 2017 and add 5% to those sales prices and that will provide realistic guidance of where the housing prices will retrace to. ALL of the above is strictly entertainment and not financial advice. ;-) GOOD LUCK EVERYONE!
COINBASE:ADAUSD
by Askatec
1