Housing
New trade signaled - Sell TW/ LNTaylor Wimpey has steadily under performed the benchmark index over the past few months and looks set to break lower. Sell with a stop at 146.5p, targeting a move down towards the 'Brexit' low at around 118p
Bullish Continuation? Going long on a retest of the .32450 level (61.8 Fib Level). Pair has been bullish for a while now.
OPEC news didn't do this pair any favors. Canadian Housing News comes out tomorrow.
Thoughts?
PHLX New HighWill PHLX New High break UP or do we have nice SHORT Opportunity from 2016 TOP?
Inverse HS on Daily?
iBrokers
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Real-Estate Not Looking Good? Buy $DRV (Elliott Wave Analysis)What is this chart? This is the Real-Estate Investment Trust (REIT) $MSCI it is the underlying asset for the 3xLeveraged Short Real-Estate ETF $DRV.
Why is it important? Because if you buy $DRV during a housing market crash you can make some pretty insane returns, and if you look at the Elliott Wave count (unconfirmed) you will see that $MSCI has possibly just completed Wave-c of an Extended Zigzag. Since it also ended with a terminal impulse it means that at a minimum Wave-c needs to be completely retraced but since we are completing an extended zigzag, and we are most likely in a triangle, it is highly unlikely that we'd retrace ALL of the entire zigzag because, based on my stock market count, we are in the 2nd "Three" of a major correction that started in 2000.
What does this mean? It means that if my chart is correct the Real-Estate market, and the US Economy, is about to collapse. The process will be slow and painful but this is a perfect starting point for it., the stock market is also reaching a nice high at this point it has basically triple topped. It seems like my related chart will probably continue to be right and the stock market growth will pretty much come to a halt and then the whole market will fall through the floor after about a year. I except there to be blood in the streets by the end of this. It will be at least as bad as 2007-09.
So how do we know if this chart is right? Well first of all it's still extremely speculative (lower probability), if you wait for it to first break the lower yellow line, and then to break the red and blue lines, it will have more or less confirmed the Wave-c impulse and also the entire Zigzag. If you wait until the blue line there is still plenty of profit left but you did miss out on quite a bit (especially on $DRV) so it may be a good idea to take the risk of being wrong and start moving capital into this trade now. Since Wave-c ends on a terminal it needs to retrace the terminal in 50% or less time it took, and typically its much faster than that. This means that if this chart does end up being right the housing market (and in particular $MSCI) is going to crash very fast and very hard within the next year.
How do we know if this chart is wrong? Well this would be the tippy top so if it moves up even a little bit from here it would be a good idea to stop-out and wait for a break down before taking this trade. That means that if you take the trade now on $DRV your R/R is over 1:1000. If you wait until there's a break down your R/R isn't quite as fantastic but the probability that this chart is correct increases substantially because it eliminates any other possibilities I may have overlooked.
Remember that $DRV is the big play here. The gains made from shorting $MSCI are nothing compared to what $DRV could be worth in a recession. The only reason we look at $MSCI is because it is the underlying asset for $DRV and because it's wave patterns are much more clear. Again this is a very speculative and risky trade at this point it's definitely not recommend that you get overly aggressive until this trade has more confirmations!
The clouds are definitely dark over Cyclical City, I would be seriously cautious about being invested in housing and anything that is cyclical in nature for the next couple of years. The market has had a good run for the last 7 years but now it looks like its time for the cycles to change and for the Economy to once again enter into a bearish period.
It doesn't look like Real Estate likes higher interest ratesReal Estate (VNQ) didn't quite climb back up to the since-2009 purple line last week, and it started to drop away from it this week.
DATA VIEW: NEW HOME SALES UPDATEUS housing market, measured by New Home Sales is continuing its recovery in line with its relevant trendline, in line with Housing Starts and Building Permits data.
However in comparison to Starts and Permits, New Home Sales data comes in with a much softer slope.
Thus the expected recovery of this indicator is expected in 2020, if its relevant uptrend holds. That is 3 years further than Housing Starts and Building Permits
Thus it comes as a no surprise, as it is harder to sell newer accommodation, when prices are significantly lower on the secondary market.
DATA VIEW (NOT A FORECAST): HOUSING STARTS RECOVERY YOUNGHousing market was hit the hardest back in the 2008-2009 US recession, which triggered by the burst of the mortgage backed securities bubble.
Since then, US economy has restored her losses in most regards, if one is to look at the economic data.
Housing market, however, started to recover only in 2012 and is yet to reach its pre-bubble performance. In line with New Home Sales data, it is seen on on Housing Starts indicator (the two move hand in hand with each other most of the time)
DATA VIEW (NOT A FORECAST): BUILDING PERMITS RECOVERY YOUNGHousing market was hit the hardest back in the 2008-2009 US recession, which triggered by the burst of the mortgage backed securities bubble.
Since then, US economy has restored her losses in most regards, if one is to look at the economic data.
Housing market, however, started to recover only in 2012 and is yet to reach its pre-bubble performance. In line with New Home Sales data, it is seen on on Building Permits indicator (the two move hand in hand with each other most of the time)
LIC Housing Finance (Indian stock: NSE)Risky to buy LIC Housing Finance at this time. Fibonacci clusters of resistance are appearing at the tip of the price travel. We need to watch the levels of 506/508 carefully before buying this stock. If it fails at any of these levels, we can expect a C wave to 380 levels.
DATA VIEW (NOT A FORECAST): NEW HOME SALES RECOVERY YOUNGHousing market was hit the hardest back in the 2008-2009 US recession, which triggered by the burst of the mortgage backed securities bubble.
Since then, US economy has restored her losses in most regards, if one is to look at the economic data.
Housing market, however, started to recover only in 2012 and is yet to reach its pre-bubble performance. It is clearly seen on the New Home Sales data, examined on the chart above.
$RH Breakout$RH has a big test coming up. Was able to hold 18 month support and 50 week MA. Big test will be next week to see if it can break the 20 day MA. If it holds the breakout, buy and look for it to hit $103-$105 at the resistance.
Lumber is Sinking – Is Housing Next?Earlier this month, the idea of lumber being a signal for economic data was brought to the table (here). Lumber is not necessarily a trader’s first go-to for evaluating economic forecasts, but there is a striking resemblance in trend for lumber and the ISM manufacturing PMI data. As lumber prices dive, manufacturing data tends to do the same (and vice versa). Lumber, reasonably so, is also correlated to housing; and the US cannot have a recovery without housing participating.
The housing data over the last few years has been lackluster, and today’s data is no exception. Housing starts contracted a whopping 17 percent. That’s 14.5 percent lower than general forecasts. Weather was cold, and it is always to blame.
However, analysts were already discounting the weather issue. Wall Street’s best and brightest were looking for a drop of only 2.5 percent, so clearly it is not just the weather. According to the US Department of Housing and Urban Development, privately-owned housing starts were seasonally-adjusted at an annual rate of 897,000, or 17 percent below the revised January estimate. Single-family housing starts in February were at a seasonally-adjusted annual rate of 697,000, or 14.9 percent below the revised January estimate. Not good.
Housing completions of privately-owned housing fell came in at a seasonally-adjusted annual rate of 850,000, or 13.8 percent below the revised January estimate of 986,000.
The “recovery” bulls will harp on the permits data which was three percent higher than the general consensus. But, let’s be objective. Permits do not particularly matter much because builders cannot sell permits. Building permits are also cyclical. They tend to rise to elevated levels on optimistic outlooks but then completely collapse right be for the next recession. Permits could continue to rise, but it is not indicative of a healthy housing sector, or economy for that matter.
umber has closed well-below the massive ascending channel created when prices bottomed in 2009. Currently trading at $270.90, lumber prices are down almost 14 percent since first bring more attention to lumber a month ago. The basic assumption is that low prices are great for builders and the housing sector in general, and they are at the margin. However, a trend shift in prices indicate that homebuilders are not purchasing lumber. Homebuilder confidence fell for a third consecutive month in March.
Prices saw a bit of support at $265 but could easily hit $245 on trend continuation. To illustrate the correlation of lumber to housing, check out lumber prices relative to the iShares DJ Home Construction ETF (ITB) and the SPDR S&P Homebuilders ETF (XHB). It’s not a perfect match, but it grasps the overall trend quite well. Notice the prices of lumber, ITB, XHB leading into the housing crisis – they collapsed. This time should be no different.
The two popular ETFs now trade at a premium to lumber prices, but the upward trajectory is stalling; and this is far likely contributed to Fed-induced buying (similar to the XLE and future prices). It is only a matter of time before housing ETFs begin to rollover, too.
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Zillow: Support Levels Tagged after Price BreakdownSee our original blog post published last weekend: www.syncubate.com
When Zillow's stock closed below $123 on the weekly chart, we noted in our analysis that this was a key bearish development and to watch for the $113 and $110 support levels to potentially be tagged soon after.
Last week, Zillow traded as low as $110.56 and closed Friday's session at $112.73, just under $113.
To see more of our market commentaries and analyses, subscribe to our blog here: www.syncubate.com
Zillow Breaks Below Key Chart SupportFor detailed commentary and analysis, see our blog post published 9/27/2014: www.syncubate.com
Last week, Z tagged the $123 support area and bounced off of it, to close the week out at $130.97. However, there was no carry-over in bullish momentum. The stock has since fallen below $123, finishing Friday's trading session at $121.75.
Friday's close is significant in that the $123 level had been fiercely defended by the bulls on the weekly chart multiple times since June, as noted by the blue arrows.
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Short Office REITSMacro:
The Short term spike in yields triggered a large selloff in REITS. As mentioned in the 10 Year yield post, The yields are likely to rebound until at least end of year which could put downward pressure on REITS.
Technicals:
USDH is underperforming the S&P which is setting up for a possible short across the board over the next weeks.
The bearish divergence YTD and the recent new low today suggests that price could start reversing from the uptrend YTD.
Ideally, a short position should be entered on a weak stock within that weak industry after a retracement to the 20 DMA and a downtrend confirmation on the day chart.
Initial target: the 61.8% fibo retracement to 148
DHI surged after housing data. cup&handle idea is still validDHI is up today after housing news came out from US. There were sold 504k of nev homes compare to 442k expectatoins. Very strong upbeat. DHI was hovering around 8/21 EMA and above all key long term moving averages.
It triggered long entry when price broke and closed above $23.25 resistance one month ago.
Break above $24.80-$25 resistance area could attract more buying.
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Check my idea in the link below
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$XHB hold above $30I wrote back on 5/4 on my blog that "I'm standing by XHB" that I thought the negativity around housing was excessive and higher prices would eventually come our way. Some of the "smart" money on Wall Street was decisively negative. Among the stories predicting the fall in stock prices of the home builders included this one from Friday the 23rd.
Big investors are betting against housing (on marketwatch.com)
For now it looks like they may be on the wrong side of the trade. Two primary reasons: one fundamental and one technical.
On the fundamentals housing construction numbers from the Commerce Department were bullish as reported by Reuters:
Housing stocks rallied for a second day after data from the Commerce Department showed sales of new U.S. single-family homes rose more than expected in April and the supply of houses on the market hit a 3-1/2 year high. A day ago, another report showed existing home sales rebounded in April.
While demand is still healthy the chart indicated that the market is still bullish on housing. After printing generally lower prices for two months price hit $30 (the line of defense I cited in my post on May 4th), formed a "spinning top" indicating indecision and then rebounded hard this week.
