Showing posts with label pending home sales. Show all posts
Showing posts with label pending home sales. Show all posts

Watch For End of Day Rally

pending home salesRecently during days of flat trading, markets have been finding a trend of last minute rallying into close. I would definitely be on the lookout for such a closing today, as once again the volume is remaining very light.

Real estate REITS are on fire today, which are mostly due to the big jump in pending home sales data that was released today. One thing that doesn't make sense, is that residential and commercial real estate are in completely different markets and are experiencing completely different economic pressures. A seasonal jump in pending home sales has no effect on the large suffering in the commercial sector. However, ignorant investors see some connection as pretty much all REITs were on fire today, which as a result crushed SRS.

The markets are dangerously flirting with complete craziness as despite continuing destructive data, markets keep going up. Despite the home sales, today's personal income number came in at -1.3%, which was worse than analysts expected. Out of all the data released, personal income is by far the strongest that directly contributes to the direction of GDP. Considering personal income has dropped so far just in a month, I am very surprised we did not see a more negative reaction from the market. 'Tis the market we are currently in.

This rally can't last much longer, oil's performance separation with stocks shows that indeed commodities may be a bit overbought (what isn't at this point?!). I will probably be pulling the trigger on some DIG puts as well as FAZ shares and maybe URE puts before close today.

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