SP 500 daily Feb 29

sp 500 may 28 daily

Over priced homes a world wide problem

Overvalued homes a worldwide problem.

WHERE are house prices most overvalued? As the rest of the world watches the bursting of America's housing bubble, that question should be at the top of everyone's mind. The answer is not comforting: many countries have had far hotter housing markets than America and are also suffering from tightening lending conditions thanks to the credit crisis.

In the latest World Economic Outlook, Roberto Cardarelli of the IMF calculates the share of the increase in real house prices between 1997 and 2007 that cannot be accounted for by fundamental factors such as lower interest rates and rising incomes. This “house-price gap” is greatest for Ireland, the Netherlands and Britain, where prices are about 30% higher than can be justified by fundamentals. France, Australia and Spain have house-price gaps of around 20%. In America, where prices were already falling in 2007, the gap is just over 10%.

May 19 SP 500 Daily Breaking the Trend Line

SP 500 Daily, we have broken the Trend Line, we could see a little consolidation in this range until the next round of news to send us in a direction.

Oil is going to hit our market harder this month if we break $140 a barrel. Today we hit 1323.875 in Electronic trading. Watchout middle america your real income is dropping.

It seems the Fed is finally seeing the light of day and moved out of their cave. Announcing that there is some inflation and that out side of oil and food there have been price increases. Makes it sound like the bankers only eat expensive things that have really been affected by shipping and gas prices.

SP 500 daily May 19 after close

Where will we go. A gradual asceding wedge hitting the 200MA. Accumalation getting tighter and tighter between out trend lines. Volume is flat for the past week. 7 green candles in a row with alot of unsupported price in the highs.

No secondary market for Loans.

According to Inside Mortgage Finance, an unbelievable 99% of all new mortgages that were securitized in April went through Fannie Mae, Freddie Mac or Ginnie Mae. That compares to an "Agency" market share of less than 50% one year ago, proving that there's simply no secondary market for non-agency product at this time. That is an amazing statistic. NO secondary market..

Expect more volatility in interest rates this week. Today we have the LEI (index of Leading Economic Indicators), with the PPI report (wholesale inflation) due out tomorrow. Neither of these reports are expected to have a big impact on rates unless they miss expectations by a wide margin.

The most important news item on the calendar this week will be the FOMC Minutes, released on Wednesday. Traders will comb through these minutes to look for confirmation that The Fed has changed its posture toward interest rate cuts going forward.

Jobless claims up, single family housing down.

Jobless Claims continue high, U.S. Industrial Production (factories, mines, and utilities) was -0.7%, twice as weak as anticipated by economists, and capacity utilization, which measures the proportion of plants in use, fell to 79.7 percent, the lowest since September 2005. Lastly yesterday we had the Philadelphia Fed Index come out at -15.6 in May, better than forecast, from -24.9 in April. ( Readings less than zero signal contraction.)

Today we had Housing Starts increase by 8.2%, but the increase is entirely due to multi-family homes, up by 36%. In contrast, single family starts fell by another 1.7%, albeit from an upward-revised base. This follows the large decline last month, when starts fell by 13.8%, and year-over-year starts are down 30.6% - no surprise given the inventory levels that are out there. Building Permits were up, and single family permits rose by 4.0%, the first rise in a while. After it we have the 10-yr sitting at 3.87%.

SP 500 daily May 15

Coming into a tighter consolidation pattern.

Treasuries and Euro

U.S. Treasuries fell, pushing two-year yields to the highest level in a week, as a bigger-than-forecast increase in a measure of retail sales bolstered speculation the Federal Reserve will keep interest rates unchanged next month. Two-year notes led declines as traders bet the Fed's seven rate cuts since September will help the economy emerge from the biggest housing slump since the Great Depression. Import prices rose more than expected last month as the dollar set a record low against the euro.

The yield on the 30-year bond rose 7 basis points to 4.61 percent as oil reached $126.98 a barrel, a record high. Excluding autos, retail sales increased 0.5 percent in April, after a 0.4 percent climb in March, the government said. Futures on the Chicago Board of Trade show a 92 percent chance the Fed will hold its target lending rate at 2 percent on June 25, up from an 86 percent likelihood yesterday. The balance of bets is for a cut of a quarter-percentage point. Traders also see a 43 percent chance the central bank will lift the benchmark rate to 2.25 percent by year-end.

SP 500 daily May 12 after hours

we have a few areas of confluence on the horizon. It looks like we might test a little higher to the 24 to 27 range and dependant on volume we could see a push to 1441. This would hit the 200 day moving average and also be a fibonacci retracement.

We shall see. If we get a lower high from here we will test the next level down.

Treasuries and Crude

Ten-year Treasuries rose before a government report tomorrow that may show retail sales in the U.S. fell last month, underscoring that the economy may be slow to improve.

Notes also advanced on speculation investors will use coupon payments this week to add to bond holdings after the government's quarterly sales of $21 billion in debt last week. Yields on 30- year bonds, among the most sensitive to inflation expectations, touched the lowest in more than a week as crude oil fell for the first day in seven. Retail sales probably fell 0.2 percent in April, following a 0.2 percent advance in March.

US corporate debt accelerating $8 a gallon gas

Thirty-year Treasuries fell earlier after a report showed initial jobless claims declined more than economists had forecast in the week ended April 26, to 365,000 from 383,000 the previous week, the Labor Department said today in Washington.

U.S. 30-year Treasuries rose as yields close to the highest since February attracted investors before the government sells $6 billion of the maturity today as part of its quarterly refunding program. Treasuries also gained as traders bought back securities that had been sold as a hedge for corporate bond issues. Companies including DirecTV Group Inc. and Colgate-Palmolive Co. sold at least $12.1 billion of dollar-denominated bonds yesterday as sales of investment-grade U.S. corporate debt accelerated to a record pace.

What's going on with Oil Prices? Economists are predicting that anywhere from 6 months to 2 years time, the price per barrel will be $200!!! What does that mean for you at the pump? It could mean that you may be filling up your tank for close to $6 to $8 a gallon.

May 8 SP 500 Daily Chart

Worst housing slump in a quarter century

U.S. Treasuries were little changed, with 10-year yields close to the highest level since February, before the government sells $15 billion of the maturity today. The Treasury Department's auction today will be the biggest for 10-year notes in four years. The government will also sell $6 billion of 30-year bonds tomorrow as part of its quarterly refunding program.

The head of government bond trading for Standard Chartered quoted that he expects the Fed to be aggressive in the take back of all of the easings. According to him, we may see an increase of 75 to 100 bps in the Fed Funds rate a lot quicker than most people think. Well, the Fed giveth and the Fed taketh away I suppose.

Pending home sales fell 1 percent in March after a revised drop in February of 2.8 percent that was bigger than previously reported, according to the National Association of Realtors. Recent reports indicate the worst housing slump in a quarter of a century is far from abating. Purchases of new homes plunged in March to the lowest level in almost 17 years, while the median price fell the most in almost four decades, according to the Commerce Department.

sp 500 daily May 6

Treasuries and jobless rate

Treasuries fell pushing the two-year note's yield to the highest since January, after a smaller-than- forecast loss of U.S. jobs in April led traders to bet the Federal Reserve will stop lowering borrowing costs. Two-year notes were on course for a third straight weekly decline amid speculation the Fed's rate cut this week will be its last. The two-year note yield rose to within 1.36 percentage points of 10-year rates, the closest in more than three months. The central bank has slashed its main rate a total of 3.25 percentage points since September to support the economy.
U.S. employers eliminated 20,000 jobs in April, after a decrease of 81,000 in March, the Labor Department said. The U.S. hasn't lost jobs for four straight months since 2003. The jobless rate fell to 5 percent, from 5.1 percent in March.
Traders see an 84 percent chance the Fed will leave its target rate for overnight loans between banks at 2 percent at its next scheduled meeting on June 25, futures on the Chicago Board of Trade show. That likelihood has risen from 80 percent yesterday. The rest of the bets are for the Fed to cut the rate to 1.75 percent.