Housing Crisis still not over

WASHINGTON (AP) — First-time homebuyers looking for bargains snapped up about half of all homes sold last month, but the spring selling season is getting off to a lackluster start with sales falling more than expected from February levels.

The median sales price in March was $175,200, a plunge of 12.4 percent from a year ago, but higher than February’s median price of $168,200. While median sales prices typically rise slightly in early spring, the 4 percent monthly increase was larger than expected.

Read the complete article here

Also see where NY city is with respect to House Price to Median Income.

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Bear Market Rally to correct

Back in early March, I called the possibility of a short term snap-back bear market rally. The rally led mostly by Financials lasted about 6 weeks (longer than I expected). I think it is time for some profit taking. I expect the market to start the correction process sometime this week. While I don’t think the major indices will retest the March lows again (agree with Doug Kass on this), I think the market will zig-zag from here (780-830 on S&P??) until the 2nd quarter earnings (mid summer) and then followed by another major rally in mid to late summer.

I like this chart posted by Michael Ashbaugh on Marketwatch.

You can read his complete article here

Filed under: Financial Markets, Trading Strategy, Finance | | No Comments »

Capital One reports deeper loss than expected

Consumer credit card is the next shoe to fall. Commercial real estate is not too far off. All the amazing bank earnings (fake+convenience) that we saw in the last week or so are already baked into the market. I say it is fake because it is our TARP money that were recycled into earnings.

“The credit card company also said it expects managed charge-off dollars in 2009 will be higher than the $8.6 billion it previously projected. Its shares dropped $1.74, or 12 percent, to $13.31 in after-hours trading. They had risen 12.5 percent, or $1.67, to close Tuesday at $15.05 before the earnings report.”

http://finance.yahoo.com/news/Capital-One-reports-deeper-apf-14990908.html?.v=2

I think all major indices will test the 50 dma this week.

Filed under: Economy, Financial Markets, Finance | | No Comments »