Lumber

Critical juncture for Lumber. After two failed attempt to break its longer term downtrend, Lumber is back knocking on the uptrend of its fledgling 2009 rally.

Oops! Not looking good for lumber here. Taking a closer look it appears 178 will be tough resistance to break thru. A short would put a stop in at 182 while looking for a target of 150 setting up a longer term double bottom. Appears lumber traders think new home starts won't pick up until Spring 2010. They're probably correct on that count.

Used Home Inventories July '09

The seasonal inventory build is underway. It's going to be hard to get much pricing traction with inventory still too high. Any strength is going to be met by higher listings sapping pricing power.

Used Home Sales July '09

After stablizing, used home sales are actually picking up. Desperate sellers and eager investors/1st time buyers are providing some much needed liquidity to the marketplace. Appears sales volumes won't much below 3,500,000. This is great news for transaction based market players who downsized during the downturn. Escrow, title insurers, agents and low end builders should be looking at strategies to increase their market share.

Case Shiller Prices June '09

Prices aren't dropping as fast as they were. Investors and 1st time buyers are providing a much needed floor on low end prices. Investors may have deep pockets and continue to support the market. 1st time buyer pent up demand will wane as the tax credit expires. Builders and their lenders desparately need prices to stop dropping in order to curb their losses. Low end builders may be nearing this point. High end builders will continue to bleed. Take your losses this year in order to be competitive in the marketplace.

Ugh. Deduct closing costs and the average is back at 2002 prices. Tough spot for any high LTV buyer or refi'er to be in. Each uptick in pricing is going to be met with new listings from those high LTV'ers who've found an acceptable price point to unload their home. There will be no "V" shaped price recovery. Hockey stick to come.

Nationwide New Home Inventory 709

The inventory liquidation continues. New home inventories have been halved during 2009. Difficulty in financing standing inventory is going to continue to pressure inventory levels. Getting down to 200,000 would be supportive to pricing.

Even with the a halving of inventory levels, months supply is still too high for the current environment. Months supply needs to backoff to 5 before pricing can firm up. August thru mid-October sales will tell the tale.

ht http://www.calculatedriskblog.com/ for charts.

Nationwide New Home Sales July '09

chart from http://www.calculatedriskblog.com/

Spurred by the tax credit, low mortgage rates and lender pressure on builders, nationwide new home sales showed some seasonal strength improving over June. Still, it's the 3rd slowest July sales since 1963. With the tax credit expiring at the end of November, new home sales (& used home sales) should show relative strength thru mid October. Builders would be well served to use the opportunity to further liquidate inventories. With nearly 1 in 10 workers unemployed and 1st time buyer pent up demand being used up, the future is not so clear.

Dr Copper

Frequently touted as a key economic indicator of the health of the economy, Dr Copper has been on an absolute tear in 2009. More than doubling! If Copper is indeed a forward looking prognosticator, take a look at whatelse shows a similar potential Cup & Handle.

Oil recently tagged its 50ma and is looking to jump its neckline. Tight risk/reward with stops below the 50.

QQQQ Daily

Looks like a breakout. Stops below 39.4 look impregnable.

SPX Weekly

Not much resistance until 1100. That's a nice 10% move. A break below 957 changes things, but looks highly unlikely until 1100 is reached.

SP500 Daily

Hard to call this anything but a breakout. Indicators all moving North. Volume is reasonable. Stop below breakout.

NAZ Long Term

Breaking out! Indicators are extended which is to be expected. Target is indicated.

Yen

Looking heavy here. 100 is calling. A break below 104.50 confirms the move. A weak Yen typically helps equities.

Euro

The Euro is making the move. This bodes well for equities, metals and commodities. Buy at 142. Stop at 141.

Oil - Long Term

Bummer! Looks like Oil is headed higher. A break above 74 opens the door to $100 a barrel. First target is near $82. A close stop after the breakout is 73.

Gold Update

Good setup here. Possible 5 wave triangle correction in the 4th wave. Could be explosive. 935 would be a great buy, with stops at 933 (904 is a stop for investors). If the triangle works, 1150 could be reached shortly.

5 Year Treasuries

As long as the 5 yr Note holds it's trendline, 5 yr rates should move higher. Great stop opportunity at 23.95. Targets 34.

S&P 8-12-09

Could it be a H&S? Nobody is going to believe it after last month's H&S fiasco. SPX is heading to 980, which aligns with the 20ma on the daily. Stops at 1000.

Update 8-22-09. 980 on 8-17-09. Gone Long.

NAZ 8-12-09

The Naz looks headed for 1950. Stop at 1978. Hopefully will be able to get in the position after the 60s indicators rebound a bit.

Update 8-23-09. Made it to 1930 on 8-18-09. Making the move higher.

Currencies - Long Term

Can the Euro breakout? 140 is a pretty good stop with a target of 150.

The Yen looks vulnerable. A close stop would be at 105. Targets 100. A measured move would get it closer to the 200 near 95.

S&P - Long Term

There's not much reason the S&P doesn't go to 1,225. Looks like a backtest maybe required first. Stop is at 950. 1st target is at the down trendline, 1,140.

Gold - Long Term

Gold looks headed for a break out. Nice trend line support with a potential inverse head & shoulders. Stop is at 932, below the trendline and the 20. First target is $1,000. If Gold breaks out, it targets $1,150.

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