U-G-L-Y, You Aint Got No Alibi

The housing numbers were ugly and there is no other way to cut it. I heard a bull defending the numbers by saying its a good thing because we need less supply. These are sales, not housing starts. A rise in sales clears supply. The expiration of the tax credit is likely the reason the numbers were at a record low as demand was pulled forward but the numbers are still not pretty.

The economy is stalling before:
  • Stimulus wears off
  • Municipalities cut spending
  • Europe cuts spending
  • China hits the brakes
I am bullish for a trade but I am not fooling myself into believing that its not that bad because I am rooting for my book.


Onlooker said...

Classic post-Fed announcement spasm. The market is a strange animal, ain't it?

Anonymous said...

You didn't have long there to unload your SPY, hope you had a quick trigger. You seem way too bearish medium term to be picking up nickels in front of bulldozers like this...


Anonymous said...

My only concern is that with all this bad economic info, it seems too obvious that the market should go lower? Am I wrong? Do I start to short here?

Tsachy Mishal said...

I think a rally through July 4 would be a better setup to short. That doesnt mean we will get it. I am happy to sit it out.