The markets continue in limbo, as Friday’s after-hours ramp didn’t hold up (for a change) and currency markets continue to vacillate. DX is pushing toward a potential reversal and resumption of its uptrend at one of two .618’s…
As of this moment, there’s a nearly completed Butterfly Pattern at the red 1.272. It fell .53 shy on the opening thrust, which is probably good enough given the larger forces at work such as the double top we’ve discussed extensively.
UPDATE: 10:05 AM
The NAR existing home sales came in at 5.08M versus 5.28M expectations — a big miss considering it’s seasonally adjusted to begin with and that NAR is well known for huge revisions following inaccurate (cheerleading) initial reports. This data reverses a 3-month trend of increasing activity and, due to the lag, doesn’t even reflect the impact of higher mortgage interest rates. Distressed sales continue to make up almost 1 of every 5 transactions.
Past Freddie Mac data indicates sales will continue to slow once the real impact of higher rates is felt in the marketplace.
There’s no denying that average prices have risen in many markets. The MSM attributes it largely to an inventory shortage. I continue to suspect it’s largely a function of activity in the lower end of the price range — mostly from institutional buyers of distressed portfolios. CoreLogic reports about 2 million units still in some stage of foreclosure, and foreclosure filings are once again on the rise.
UPDATE: 11:08 AM
SPX just pushed up through this morning’s high. I suspect the 1.618 at 1698 — call it 1700 — is in focus. I’ll take an interim long position here at 1695, but leave our core short in place.