Tuesday, September 18, 2007

Stock market and housing

There were 2995 advances on the NYSE and only 334 declines. UP volume was an amazing 96.4% of up + down volume.

Total volume expanded bullishly to 3.40 billion shares.

The VIX plunged 6.13 to 20.75, one of the biggest declines in the VIX I've ever seen. Fear is collapsing with today's super-bullish action.

Looks as though this was another 90% up day, but this time the missing ingredient came in -- EXPANDING VOLUME. The primary trend of the stock market is bullish. The secondary trend of the market is bullish.

The stock market has discounted the worst that it can see ahead, and that's enough for me. There isn't going to be any housing disaster, there isn't going to be any recession. Don't get me wrong, there's still going to be plenty of trouble for the people who are stuck with rotten mortgages, but the stock market is saying that the housing trouble is not going to flatten the economy. The stock market is saying that in due time the housing trouble will be put behind us.

Latest -- On the news of the Fed Funds cut, gold surged over 8 dollars in the aftermarket with the Dec. contract at 731.70.

From: RR

9 Comments:

Anonymous RayW said...

Let's party like it's 1929!

9:35 AM  
Anonymous Anonymous said...

"There isn't going to be any housing disaster..."

I tend to agree with you. Especially in the better neighborhoods of the Bay Area prices are still going up. At this point, I think Bay Area real estate is a good investment (except for condos in Marin of course).

Maybe you should change your domain name to "nobayareahousingdesaster.com" ?

11:09 AM  
Anonymous Anonymous said...

I think the housing economy is disaggregating to such an extent that there may still be a disaster in some sectors while others experience continued growth. My neighborhood in Berkeley is still experiencing ludicrous bidding wars and 10+ percent annual price increases. In the broader sense, a recession may occur for some sectors of the U.S. economy while others (more reflected in the DJIA) do just fine.

12:49 PM  
Blogger TH said...

A rate cut of 50 bps should tell anyone with a brain that the Fed thinks things are a lot worse than they look. Since Bernanke is not God, he will not be able to reinflate the credit bubble and resurrect a housing market that has locked out entry-level buyers, leaving only the wealthy to play musical chairs with their mansions. Therefore, housing will remain a poor investment anywhere until at least 2009. IMO.

1:44 PM  
Anonymous RayW said...

Anybody bidding up houses in Berkeley deserve what they get...an overpriced house built on top of the Hayward fault in city of fools and NIMBY's.

3:10 PM  
Anonymous wondersalve said...

the market is wrong. the market is often wrong. but you know why the market is even more wrong this time than usual?

because people with the money in the market have big fancy houses. multiple, illiquid houses. so they are being emotional. they are hoping against all logic that a rate cut is going to fix this problem. and so far in their neighborhoods (NY, SF, etc.), housing prices aren't falling yet, so they won't right? wrong.

6:35 PM  
Blogger Tyrone said...

Bay Area foreclosure activity skyrockets
http://tinyurl.com/2u5map

A surge in foreclosure filings in August might signal a new wave of people losing their homes as more mortgages reset to unaffordable rates, according to a report released Tuesday.

The number of homeowners behind on their payments hit 5,705 in the Bay Area, almost triple the 2,104 from last August.

10:59 PM  
Anonymous Anonymous said...

That's right, even though the housing bubble has burst just like the Hindenburg in every corner of America, the "better neighborhoods of the Bay Area" will escape the disaster. And of course this same thinking is taking place amongst the residents of the "better neighborhoods" of the westside of L.A.

Buy now before you're priced out of the market forever!

1:44 AM  
Anonymous Anonymous said...

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1:17 AM  

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