US housing market, a key contributor to US economic growth via the wealth effect that will trickle down to consumer spending & confidence.
We can decipher its impact on the overall stock mkt via sentiment/technical analysis on2/2 The recent rally of the $XHB from 19 Oct 22 low to 22 Nov 22 has been accompanied by declining volume & underperformance...
Todays FOMC minutes stated they will "support slowing of interest rate hikes soon to assess the lagged impact of monetary policy"
XHB - Homebuilders etf will benefit most from slowing or pausing of rates.
New home sales data today reported better than expected results too.
Broke with huge volume on 10th November
Buy was triggered.
I did not enter as it was gap with $3 range bar.
Then retraced to converging EMA.
Now Stochastic black bar on top
Elliott oscillator green
Retraced on lower volume
Yester small gap up high volume than last 4 days retrace.
Today (23/11/2022) i will place a buy above yester high SL $58 near 50-day average.
Previous uptrend as in chart
Second Bottom lower than first one
And did not break the low when small rally on left began from 51.23 levels
CCI is green as of now
Pivot 59.44 need to break
Elliot oscillator need to become green
Stochastic need to turn up and have black bar on top.
I'm looking at XHB weekly timeframe and comparing 2006-2009 US housing market with current situation. On 17 July 2006 XHB bounced 38% then dumped and lost previous swing low/ key support /28-30$ level/ on 23 July 2007/371 days/. When XHB lost key support SPX made first top and second top was 3 months later with bearish divergence, after which S&P dumped 57% and...
Simple chart to look at the relation between hew home builds, a broad housing ETF and a mortgage lender.
It demonstrates that they all have a strong correlation and that mortgage company performance is a leading indicator of housing market performance and that new build housing stocks are a leading indicator for the housing market in general.
Just as the real estate sector, expect homebuilders continue to correct the same. Nice pull back for a wave 2 will present a amazing opportunity as we move forward in the decade. Inventory is very low which is good since rates are moving higher.
This could be a leading indicator for what is to come. Let's keep an eye on it.
We do have a bearish divergence on the monthly RSI. It also is happening on the weekly as well.
It is to early to tell what direction it will go. We should expect a strong bounce from here and see where it goes.
I wonder if we are about to witness a market "correction" of biblical proportions, right in time for Easter.
So far this decade, all bearish bets have basically been slaughtered, but fundamentally, this is still a grand delusion, likely the greatest financial heist in the history of all our civilizations.
I added XLB short. I was using the daily stoch as swing trade short.
Know I am moving from the daily chart over to the weekly chart for longer term position
The weekly stoch under 30% and crossed down and u have lower highs
target 26. Look daily vol more selling
I have order really load up breaks 64 green arrow
This can be a good short with all the discussions about rising rates. Chart is setting up a bear flag on a crucial level. When this gives out there isnt much support underneath. Taking a position in puts.