I have been hearing this from my children up in the Seattle area…but look at what’s in the S&P press release just out on housing prices:
NEW YORK, JANUARY 30, 2018 – S&P Dow Jones Indices today released the latest results for the S&P CoreLogic Case-Shiller Indices, the leading measure of U.S. home prices. Data released today for November 2017 shows that home prices continued their rise across the country over the last 12 months.
The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, covering all nine U.S. census divisions, reported a 6.2% annual gain in November, up from 6.1% in the previous month.
The 10-City Composite annual increase came in at 6.1%, up from 5.9% the previous month. The 20-City Composite posted a 6.4% year-over-year gain, up from 6.3% the previous month.
Seattle, Las Vegas, and San Francisco reported the highest year-over-year gains among the 20 cities. In November, Seattle led the way with a 12.7% year-over-year price increase, followed by Las Vegas with a 10.6% increase, and San Francisco with a 9.1% increase.
Six cities reported greater price increases in the year ending November 2017 versus the year ending October 2017.
But look closely at the price chart nationally and tell me what you see:
Could the 20-city average be doing a long-term double–top?
While the national average is already above 2006, we have to wonder how far – and what that figures to on an inflation-adjusted basis?
Some thoughts possibly tomorrow on the subscriber side.
Beginning of the End or End of…
Besides the Housing data this morning there is this ugly thing going on in the markets today with the Dow set to open down 150 to 200 – and that would be on top of a 177 point nosebleed Monday.
As I told Peoplenomics readers Saturday:
“Cowardly George is back in cash because there’s something in the replay of 1929 scenario that is bugging him. Namely, there was a short, sharp pullback in the 1929 bubble that could be coming due and I’m not too sure of the timing of it.”
Historically, we are in a strange rhyme. And using our Aggregated markets approach, the parallel to the 1920-1929 run-up continues to be remarkably useful.
While in 1929’s timeline, we would have already been up to the peak and just finishing the B-wave bounce after the ’29 crash bottomed out, we have gone up much slower this time.
A couple of reasons are likely: First is that the 1929 run seemed to go up faster (on a weekly closing basis) because there was a lot of Saturday trading going on.
When we back out 6 days per week into 5 days, we would expect the blow-off top this time to take 16.6% longer on the calendar.
On the other side, we don’t know if the massive head and shoulders technical formation seen in 1929 will repeat. There’s a fair chance it will be one big top and then things will cave in. Monday and Tuesdays action might fit though…so a look at that on the subscriber side tomorrow.
What really is “different this time” is dispersal of information through the financial system – something much cleaner now that it was back then.
In the 1920’s, when a person received stock market data, it was usually in the evening newspapers. And by the time an order was entered with a brokerage firm, the transaction would not even make it to the floor until the next day, perhaps around 10 AM.
Counter-intuitively, faster information slows market action, perhaps because price-discovery is quicker
The Depression’s low-speed trading (and time lags) introduced a lot of asymmetry into the market in terms of information homogeneity. Now, (with the crooked exception of high-frequency trading) most the market information is reasonably uniform. Near as I can figure it, that tends to slow volatility.
A lot will depend on how the balance of this week rolls. A drop ahead of the Fed meeting is a regular occurrence. Scare them a bit…hold back a rate hike?
But, for now, our best case looks like we will take a pause here, then make one more run to all time highs perhaps in April to mid-May. A pullback for the semi-annual Sell in May and Go Away event. Then one more blast-off to the final highs around that third week of August timeframe which didn’t happen last year.
Fortunately, though, our charts kept us out of the ditch when last summer didn’t show up as we figured.
Amazingly, our model hasn’t been short since Trump’s election. And been long hasn’t been a bad place to sit…as long as I don’t second-guess my own work.
Bitcoin, meantime, continues trading in the $10,900 area when we checked on that. Sadly, that is still in the downward trend channel we described last week.
The good news for the coiners is that if they can keep BTC from collapsing in five waves to our $483-850 target range, they might be able to log a three wave decline, in which case something down in the $8,500 range might be a bottom from which another run to the new all-time highs could launch from.
No point in over-thinking either one of these markets, though. We just look at the data (with a very unconventional view) and for the most part we’ve been pleased with the results
When I ignore the short-term model it’s usually a strong “spidey sense” – which is why I clicked out Friday. I sleep better in cash. YMMV.
The end of January is in sight and the applicable old saying is “As goes January, so goes the year...”
With Trump-hating very much in vogue, it seemed illogically logical that the end of January would see a sharp sell-off, because without it, Trumponomics could go stratospheric.
So we’re braced for more downside (watching, not short) as we see if you-know-who stays on script with the SotU tonight and what the Fed unveils in the way of a possible rate hike tomorrow.
Shocks of any kind? That could press down hard on markets, but to try and “catch falling knives” (which works in options) doesn’t play so well in stocks. We’ll have lots of time to enter a collapse after the wave 1 at the top of a wave 2 bounce, if that’s hbow it plays.
Speaking of the SotU Tonight
There they go again, the NE media digging every chance they can to get in snide remarks about the president. We didn’t think the Washington Post’s “State of the Union gives Trump the chance to ‘act presidential,’ at least for a night…” was particularly clean.
What do they mean ‘act presidential at least a night?‘ See how bias is worked into the mainstream? False narratives abound and while it may play well with the Trump-haters and sell a few papers to them, we read it as yet another of too many jabs by the erudite left.
If they would just remember Trump IS the President and newspapers are poor theater critics when comes to acting judgements.
Sour grapes? Absolutely. You see, I’m old enough to remember when the Post did less slurrish reporting.
While CNN keeps selling “Trumps war on Russia probe” it’s nothing but the left worried about what’s coming. Even the NY Times mentions that Andrew McCabe who just left the FBI…well, here, you read what they said:
“He [McCabe] first drew Mr. Trump’s ire because his wife, Jill McCabe, ran for a State Senate seat in Virginia as a Democrat and accepted nearly $500,000 in contributions from the political organization of Gov. Terry McAuliffe, a longtime friend of the Clintons.”
Meantime, stories like this one “Report: Trump called Andrew McCabe’s wife a “loser” in a bizarre call” but they don’t highlight that yes, McCabe’s wife did lose her political campaign.
I must be some kind of stupid because if someone didn’t win, they are a what?
China Eyes Taiwan
While the North Koreans have dialed back their annual winter military maneuvers due to the impact of sanctions hitting hard, our military affairs chief has become focused on China and its designs on Taiwan…
“Keep an eye on events surrounding Taiwan. Most recently, China unilaterally began flying unauthorized air routes to Taiwan.
Naturally, the Taiwanese cancelled the flights, yet the mainland airline company is alleging financial harm to the company and gross inconvenience for its customers.
Sly tactic, yes? Just one more indicator (along with Man made islands and an electronic ‘wall’ being erected around Taiwan by the mainland, that this area of the world is about to get interesting.
Oh, and watch also for signs of the N. Korea ‘head fake’ which will likely accompany any move on Taiwan by the PRC.”
Meanwhile, Back at the Distracto-mat
Naturally, we’re wondering why the SJWs aren’t pressing for a White Panther, Latino Panther, Gay Panther, Lesbian Panther, Trans Panther, Asian Panther, Native American Panther, and a Panther Foundation for the Special Panthers.
I’m sure they’ll get to it…as soon as they get over Trump-bashing. In 2023, maybe?