I am sorry for the lateness of my post, but I had some major computer issues all morning that were hindering my ability to post earlier. For that same reason, this post will be shorter than usual, as I will be just getting right into the meat of things.

Due to my lateness, I am able to base my picks off of the 8:30 AM economic data. Housing starts and building permits for July were released this morning, missing expectations to the lower side. Building permits came in at 0.56M, which was actually below the June levels. Housing starts came in at 0.58M, while expectations had been for 0.60M. Additionally, the PPI and Core PPI were released this morning, missing estimates. All four major economic indicators missed.

Going into that data, the market was trading futures up around 35 points at the Dow. At 8:40 AM, the futures are now at . The market definitely wants to rebound today, and I think it will start the day that way. However, with this weak economic and continued sentiment that we need a pullback. I think we will top out this morning after some rising, and then make a move back down from there.

When that happens? I don’t think we will have to wait long. If we get up 50-60 points on the Dow, profit taking will occur, but it may not take that long.

Buy Pick of the Day: Ultrashort Proshares Real Estate (SRS)

As of 9:45 AM, the ETF is still trading down, but it is making its move back up in pre-market trading. It is still down 1%. SRS had a pretty major jump yesterday of almost 10%, and some profit taking might be expected. However, that is where you and I will benefit. There is going to be some early downward pressure on the ETF, and it probably will open lower than expected. Yet, you can’t rally on Home Depot’s beating expectations alone when there were four missed economic indicators. The housing sector has become way too overvalued, and it is need of more correction still.

Across the board, everything is pointing down this morning. Saks’ earnings were a miss as were Solarfun Power’s. The only other good news is Target beat expectations, but that was already priced in after Wal-Mart beat expectations. I just don’t see anything to move this market. The upwards open we are seeing is just reactionary to the…
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