Hot Housing Numbers for Breakfast

Hot off the S& P Press release:

New York, August 25, 2015 – S&P Dow Jones Indices today released the latest results for the S&P/Case-Shiller Home Price Indices, the leading measure of U.S. home prices. Data released today for June 2015 show that home prices continued their rise across the country over the last 12 months. More than 27 years of history for these data series is available, and can be accessed in full by going to Additional content on the housing market can also be found on S&P Dow Jones Indices’ housing blog:  

Year-over-Year  The S&P/Case-Shiller U.S. National Home Price Index, covering all nine U.S. census divisions, recorded a slightly higher year-over-year gain with a 4.5% annual increase in June 2015 versus a 4.4% increase in May 2015. The 10-City Composite had marginally lower year-over-year gains, with an increase of 4.6% year-over-year. The 20-City Composite year-over-year pace was virtually unchanged from last month, rising 5.0% year-over-year.  

Denver, San Francisco, and Dallas reported the highest year-over-year gains among the 20 cities with price increases of 10.2%, 9.5%, and 8.2%, respectively. Eleven cities reported greater price increases in the year ending June 2015 over the year ending May 2015.  Denver is the only city with a double digit increase, and Phoenix and Detroit had the longest streaks of year-over-year increases. Phoenix reported a 4.1% in June 2015, the seventh consecutive year-over-year increase. Detroit recorded 5.7% in June 2015, the sixth consecutive year-over-year increase.  


So, Housing Prices stuck at late 2004 levels.  Hasn’t hurt the futures:  Up 541 on the Dow when I looked.

Turnaround Tuesday

As I was telling folks last week, look for Turnaround Tuesday and here we is.

The futures are pointing up 500 points.

Since we can trace the all time high recently of the S&P to a roughly equal position In October of 2014, we might be able to claim (*if you stand across the room to look at the chart) that this could be the largest irregular high flat IV in history.

Or, we could look at it the other way:

The S&P 500 52 week high was around 2,135 and it closed Monday around 1,893,

If you need a short class on Fibonacci n umbers, click here.

We know that retracements are often 61.8% so we look at the S&P range which has been 242 points (roughly) of decline and then multiply that times 0.618.  This would hint at a rally of around 150 points.

Given that we would count from the daily close Monday (that 1,893) then 2,042 on the upside of the S&P gets to be interesting.

That is, assuming this is not a (4) and there is still more downside to go, in which case 1,820 or so and since we kissed the underside of 1,940, that isn’t a bad bet, either.

Best thing to do in cases like this?  Sit on your wallet.  The volatility implied by this kind of free-ranging market kills any chance of making real money in options. 

But a rally to the 2,042 range an d then on to 1,820 or 1,740 even looks like how the numbers could be bounded.

imageChina;s Shanghai stock exchange was down another 7.6% last night and therein lies the real story.

Since the initial decline has been from 5,165 down to about 3,507, the decline of 1,568 for Wave 1 down may reasonably be dart boarded as 2,487 points (when Wave 2 is 1.5 times Wave 1).

Now since we know the top of Wave 2 was around 4,124,  the washout low for the SSE could be around 1,637

There are (and this is pretty interesting) a couple of ways that the SSE could fall so low that it would be effectively out of business.

And that’s why nothing would surprise me less than to see a major shakeup of the SSE in order to preserve the exchange.  On the other hand, a good bit of this is China’s devaluation, too.  So where is used to tax X number of dollars to buy the Yuan, it now takes X less devaluation.

Inside China, the collapse wouldn’t look as bad,  But that’s the magic of equal signs that we will get into in the Coping section in a minute.

Main thing to remember is that when a country devalues, there is an internal effect (foreign goods get more expensive because the Yuan doesn’t buy as much), but Chinese goods are getting cheaper by the day.

And that’s the danger to the rest of the world:  China’s devaluation is a clever way to buy market share and screw other countries out of manufacturing.

If – and this is the biggie here – IF they don’t collapse the whole global economy.

But wait!  Isn’t that what communist governments try to do?  More coffee!

Barbarians in the Sand

I have to ask the obvious (again):  What kind of political movement shows off its utter contempt and disregard for great civilizations of the past and brags about it?

I mean seriously, who would follow such a cult and why?  Don’t they know that the lessons of the past are oft repeated?

Standing Down

North Korea and the South have buried the bullhorns, at least for now.  Remember, though, the Korean  War never ended, which we could have and didn’t.  It’s an easy crisis to modulate which works to someone’s advantage.

Hurricane Possible

Oh, sure, we leave on a cruise a week from Sunday so here comes tropical storm Erika to whip up a few waves along the way.  Should be no factor on our Peoplenomics cruise, but we do keep an eye open for such things.

Side bet:  The storm hits Cuba, we offer aid, and now that relations are normalizing, let’s build some condos while we are there, shall we?


Hot Housing Numbers for Breakfast — 8 Comments

  1. “Isn’t that what communist governments try to do?”

    No, but Wall street and TPTB certainly do it (re-run of 1930s).

  2. “I have to ask the obvious (again): What kind of political movement shows off its utter contempt and disregard for great civilizations of the past and brags about it?

    I mean seriously, who would follow such a cult and why? Don’t they know that the lessons of the past are oft repeated?”

    Back to the future?

    It’s less of a political movement and more of a theocratic “borg”. Compare the “Holy” Roman Empire, and later the “Holy” Roman Catholic Church directing the slaughter of heretics, “pagans”, “heathen”, Gnostics, Druids, Incas, Aztecs and hundreds of lesser groups and tribes. Systematic extinguishing of the culture of these groups was a “feature” of these pogroms, as was forced conversion of the remnant.

    Early Islam adopted the same tactics, with less grace. Seems like the puppeteers are nostalgic for Medieval times.

  3. So if every news story has an opposite it would be safe to assume that isisies blowing up historical sites and bowl cut boy rattling his toys and hiding his submarines is just to draw our attention away from something else. Wonder what?

    Pay no attention to that man behind the curtain!, said the Wizard of Oz.

  4. China is the U.S. From the last depression the U.S. Will not have the same outcome as its fundamentals are completely different. The Chinese valuations are the problem.

    So the housing prices appear like they would be near a correctional bounce top ready to collapse lower again

  5. Barbarians in the sand … Seems to me, TPTB want to erase things so the next generation (thinks) that they are the only generation, ever. The dumbing down seems to reach across paradymes, reaching into the future. They just don’t want humans to live in that state of Grace. Very sad.