September 2012 Rally Fades Further After Good Housing Market News – Again
Stocks slid further again today as investors maintained caution regarding Europe even though housing data in the U.S. was a positive-mixed bag. New home sales kept close to two-year highs for the month of August but fell 0.3 percent to 373,000 when seasonally adjusted, the Commerce Department said today. Sales were up 27 percent from the depressed rate in 2011 and the median home price rose by 11 percent to $256,900 in August which is the highest price level since March 2007.
In comparison to last year, median prices rose 17 percent and home owners are more confident about their number one asset, although a substantial amount still owe more than their house is worth to the lender. The positive housing news didn’t sway investors similar to yesterday’s price action and stocks fell with the NASDAQ down 24 points to 3,093.
U.S. equities are looking vulnerable right now but this doesn’t mean the current rally is over yet. After an inside-outside day yesterday, we would be cautious short term unless we see more rangebound trading this week and a slight pause in volatility. When good news doesn’t matter, this isn’t positive for bullish trades but U.S. equities may be making a comeback towards the end of the week and the weakness could be a buying opportunity.
Concerns about Europe have risen in the past few days due to violent protests and technicals show their was a chance the market could seek new support.