Poor Bears!
They just can’t seem to catch a break in this up and up market. While yesterday’s housing data may have seemed good, it was up 11% from May – that didn’t make it actually good as it was down 22% from last June and that was despite the average home being sold for 12% less. If I were to tell you your home is nowworth 12% less than last yearandnext year could drop another 12%, would you be running in to buy builder stocks? Well, that was the “market” reaction yesterday to very mediocre news. In the market’s defense, this move came on very low volume so it’s only a few idiots running out and buying but it doesn’t take many idiots to make a market – just ask Cramer, who is telling his minions to BUYBUYBUY on any pullbackbecause we are in the middle of the next great bull market rally (seriously, that’s what he said last night!).
I think Jimmisinterpreted my mid-day Alertto Members yesterday where I said:
Volume on Dow at noon was anemic 70M so the wait and see crowd is in control and real men don’t come back from the Hamptons until this afternoon so tomorrow will be “Telling Tuesday” and we get some data (Consumer Confidence and Case-Shiller) to sink our teeth into. If Case-Shiller fleshes out today’s New Home Sales and looks positive, we could get enough to break higher but Shiller himself was bearish in outlook not even 10 days ago so hard to imagine major change so quickly.
A sell-off tomorrow to test our Thursday breakout levels (for theRussell535 and NYSE6,232) ahead of the Beige Book would be perfect if we hold it and an improved outlook could rally us from there. Thurs morning for the Dow was 8,950, Nas 1,940 (already almost tested today) and S&P 960 so those are now our “must hold” levels for the week to keep our horns on.
So Jim, that’s an IF we hold our levels, not WHEN. Unless Thursday’s GDP report is better than -1.5%, I don’t think we can read too much into this bounce as we are still tragically shy of our 33% levels (see yesterday’s Big Chart Review) and only BARELY above our 40% off levels that mark the top of our projected trading range. The only US index that has broken the 33% off line is the Nasdaq, that makes it a candidate for shorting…
