drbubb

Rally coming in US Builder stocks? ... update

HISTORICAL CYCLES (per Northern Trust) Recession ===== : Peak of Median Price : Trough, Median Price : P-to-Tr. =============== : -Date- : Price $ ... : -Date- : Price $ ... : Change Dec.69 - Nov.70 : Jul-70 : $ 23,700 .. : Oct-70 : $ 22,700 .. : - 4.22% Nov.73 - Mar.75 : Jul-74 : $ 33,000 .. : Oct-74 : $ 31,900 .. : - 3.33% Jan.80 - Jul.80 : Jun-79 : $ 56,800 .. : Nov-79 : $ 55,600 .. : - 2.11% Jul.81 - Nov.82 : Jun-82 : $ 69,400 .. : Oct-82 : $ 66,900 .. : - 3.60% Jul.90 - Mar.91 : Jun-90 : $101,200 .. : Dec-90 : $ 94,200 .. : - 6.92% Mar.01 - Nov.01 : Jun-01 : $160,800 .. : Oct-01 : $153,800 .. : - 4.35% Current Cycle.. : Jul-06 : $230,900 .. : Oct-08 : $181,800 .. : -21.26% Updated Cycle.. : Jul-06 : $230,900 .. : Dec-08 : $173,400Est : -24.90%Est = = = = *CS Index, 20.C : Jul-06 : CS206.52 .. : Oct-08 : CS158.16 .. : -23.42% *CS Index, 20.C : Jul-06 : CS206.52 .. : Dec-08 : CS150.66 .. : -27.05% *CS Index, 10.C : Jun-06 : CS226.29 .. : Dec-08 : CS162.17 .. : -28.34% /see: http://web-xp2a-pws.ntrs.com/content//medi...nt/dd112408.pdf The median price of an existing single-family home at $183,300 (down 4.2% mom) in October is down 11.2% from a year ago – the largest drop on record (see chart 4). The inventory of unsold existing homes rose to a 10.2-months supply in October from a 10-month mark in September. The elevated level of inventories implies that additional price declines are nearly certain in the months ahead. Chart 4 NAR Median Sales Price: Existing 1-Family Homes, United States % Change - Year to Year $ http://uk.geocities.com/briarberrys/nar-house-nov08.jpg http://web-xp2a-pws.ntrs.com/content//medi...nt/dd112408.pdf

THE CHARTS here need some updating The Case Schiller index released the December 2008 numbers yesterday, with what seems to be little fanfare. Most everyone expected the numbers to continue to show eroded values in home sales across the nation- They did not disappoint. The Composite 20 index is off 18.5% over last year and 27% from its peak, while the Composite 10 index fell 19.2% in 2008 and 28.3% from its peak. The 10 city index has been around since January 1988 while the 20 city index has been tracking numbers since 2001. These numbers reflect the worst year over year drops in value since the inception of the index, however the precipitous drop is showing signs of slowing when compared to November numbers. Leading the charge of falling prices are Phoenix down 34% year over year for 2008. The city has fallen 45% from its peak. Next in line were Las Vegas down 33% and San Francisco down 31%. Los Angeles, which includes Orange County dropped 26% ranking 5th worst. According to an LA Times article, David M. Blitzer, chairman of the index committee at Standard & Poor’s said, “There are very few, if any, pockets of turnaround. Most of the nation appears to remain on a downward path, with all of the 20 metro areas reporting annual declines.” Overall, U.S. home prices are now at 2003 levels, according to the index. /see: http://allanglass.featuredblog.com/?p=51 == == THis chart suggests an April 2007 High, which sounds too late = = = = = DATA SHOWS a different Peak 2006 jan : 202.44 , 222.46 feb : 203.19 , 223.38 mar : 203.65 , 223.75 apr : 204.82 , 224.99 may : 205.86 , 225.99 jun : 206.38 , 226.29 (( Peak-C.10 )) jul : 206.52 , 226.17 (( Peak-C.20 )) aug : 206.18 , 225.54 sep : 205.80 , 225.09 oct : 205.41 , 224.74 nov : 204.42 , 223.58 dec : 203.07 , 222.01 2007 jan : 202.03 , 220.90 feb : 201.19 , 219.94 mar : 200.89 , 219.54 apr : 200.53 , 218.94 may : 200.04 , 218.37 jun : 199.18 , 217.07 jul : 198.44 , 215.94 aug : 197.16 , 214.56 sep : 195.62 , 212.65 oct : 192.89 , 209.68 nov : 188.82 , 205.09 dec : 184.86 , 200.55 2008 jan : 180.65 , 196.06 feb : 175.94 , 190.58 mar : 172.16 , 186.06 apr : 169.85 , 183.15 may : 168.54 , 181.48 jun : 167.69 , 180.38 jul : 166.23 , 178.46 aug : 164.57 , 176.60 sep : 161.56 , 173.25 oct : 158.16 , 169.78 nov : 154.59 , 166.05 dec : 150.66 , 162.17

I'm now long 600 ounces thru GLD. But it is thru options, and so with limited risk: http://www.greenenergyinvestors.com/index.php?showtopic=6327 I am not yet sold on the LIFT-OFF concept, but felt it was important to have an exposure, give the way it has held up over $900

A bit of a "hit" on the opening. Gold down $15 to $923, and GLD is near $90.50

An interesting talk, backed up by some very good charts. The one I liked best was showing the timing of certain large mass transit projects underway in: Shenzhen and Shanghai (2012), Beijing (2015), ang Hangzhou (201?) It is hard for me to imagine the property markets fall much from current levels, as those mass transit projects move towards competion. Alva To's own forecast was that prices would tend to stabilise in 2009-2010, and then start moving higher in 2011. He didnt want to say too much about the possibibility of prices rising sooner, thanks to the mass transit projects, but he did agree with the point in my question that these projects would help. He said that HK's property market soared in the early-mid-1990's as HK's MTR system was built out. (Note: My own thinking was that money that was previously "wasted" on slow and expensive transport, could now go into property, as the mass transit expansion is finished.) The chart for Shenzhen look to me that prices had fallen back to a support level, and could rally from there. Today's column by Tom Holland in the SCMP had some interesting charts "No Recovery in sight yet for China's property developers", it was called. But I dont think his charts necessarily supported his arguments. What they did show was some deep falls, but not necessarily why prices should go on sliding. (But then, Tom does tend to see things in China from the bearish standpoint.) "Good, bad, and ugly" - he called the charts, from which I derived this data ======== Four Cities=== : Price Change : Jan-Feb Sales : Time to clear Shenzhen ....... : - 34.0 % yoy : +169 % yr-o-y : 11 months Guangzhou ..... : - 13.9 % yoy : +61.1% yoy... : 12 months Beijing ........... : - 13.8 % yoy : +27.5 % yoy... : 21 months Shanghai ........ :+ 14.3 % yoy : - 4.3 % yoy ... : 8 months Meantime, we are seeing this price action: China Overseas (HK:688) ... update Soho China (HK:410) ... update : Daily-2yrs Here's Tom Holland's conclusion: "Although credit conditions for cash-strapped developers have eased, sales volumes have picked up and share prices have bounced, real recovery in the mainland property market remains a distant prospect." My response to him: "Tom, dont you recall that the share prices will oft lead the physical property market? If so, perhaps you should stay alert for reasons why a turnaround might happen. Here's one: Look at the impact of big spending on mass transit systems in these cities, with the prices of nearby property? Many Chinese buyers are sitting on big savings. Perhaps they will want to jump into the property before the systems are finished. An upward surge in "connected" properties, will help to raise values through-out these cities. I will watch Chinese property prices with great interest. They have potential to help drag HK back up, especially if Shenzhen goes into full recovery mode. Alva said that HK prices are low enough that they are highly "affordable" for potential buyers. The recent bounce is being driven by "own use" buyers, who have the money, can afford the current mortgage rates, and do not want to miss out, in case the current rally continues. He says that a similar (dead cat) bounce also happened after the big drop in 1997. Current prices certainly are affordable. In DTZ's measure, they use prices in Taikoo Shing, and the median household income of the average HK family. Here's his comparison (the psf figures are my own estimates) =============== 1997 Peak ....... : 150% : $ 8,500 psf / $ 5,700 income? 2002/3 Low ...... : 30 % : $ 3,000 psf 2008, March high: 83?% : $ 8,300 psf / $10,000 income? 2009, current ... : 62 % : $ 6,200 psf Taikoo Shing ... update What happened after the early 1998 bounce was that prices headed lower, as unemployment in HK continued to rise. At the SARS low in 2002/3, prices were a complete bargain, but people were too afraid to buy, as HK unemployment hit 8.6%. The same fears could creep back in during 2009 if local unemployment continues to rise. In the latest months of January and February, unemployment rose by 0.5% and 0.4%. These are worrying figures, and if such job destructioon continues, it could destroy the fragile confidence within the property market.

Larry Pesavento: "Gold's in trouble." "If it falls below $920, it could fall much further." "Too many people are loaded up with gold, expecting the end of the world." "The 'Buy level' could be (as lows as) $700." L. Pesavento's podcasts : http://www.tfnn.com/interview_archives.php

RELATED POST... It already exists ! As a US citizen, I pay a tax of maybe 35% on short term gains of under 1 year, and only 20% on long term gains. I dont think it is like gambling. It is more like a detective story, or trying to solve a mystery, where the clues will always be imcomplete and lead to different and unexpected endings. == == == Evidence that I am following the rights clues, and that I am onto a better understanding of the nature of the market's mystery. Are you sure about that? Some believe that more trading breeds a more efficient and lore liquid market. If you are seeking easy profits here, you are seeking the wrong thing. You should be seeking knowledge As I said, they do that now in the US: lower taxe rate (about half) for gains over one year. You may be right. But not everyone thinks a gold standard is the answer. Sensible people regretted its lack of flexibility. I'm not so sure, But what I feel certain is needed, is recognition that excessive use of credit needs wringing out of the system. This is not the thinking that the Fed is using. They are trying to "fix" the system by loosening credit. I will seek the link later I think you see the value of knowledge offered here, which is a good thing, but dont knock those that use knowledge here to make a living, I just hope that if they have benefitted from the generousity here and elsewhere, that they will be willing to be generous to others too. If this site spreads a karma of genrousity, then it is truly doing its main job and purpose.

It already exists ! As a US citizen, I pay a tax of maybe 35% on short term gains of under 1 year, and only 20% on long term gains. I dont think it is like gambling. It is more like a detective story, or trying to solve a mystery, where the clues will always be imcomplete and lead to different and unexpected endings.

I thought you knew that I work damn hard at achieving those trading results. In getting the timing right, I had help from others, like Larry P., Tom Obrien, and some historical "giants of technical analysis". But I also did many hours of research, into deciding exactly when and what to trade. And frankly, I think I was blessed with some luck on this particular occasion. What makes you think that such hard work is not also an "honest profession."? Does the fact that people share their knowledge freely, and allow others to use it with less work, mean that it is someone not an "honest effort" that brought such knowledge. How do people lose from my efforts here? I thought the generous efforts from myself, and many others on this website would be apparent to all by now. In fact, the timing of the last conference call was designed to share the opportunity that I saw emerging with as many as I could. It sounds like you want to ban trading in financial instruments. I wonder what sort of world that would bring on? My idea is that people need to be educated on how to survive in the volatile world that we are moving into, and also to understand that it has been the over-use of debt and credit, whivh had been the main thing that has brought on this mess. I dony blame it on the financial instruments per se. That is like blaming a power drill, for a mess when someone makes a mess when using it. I wish it was so easy. The lesson I learned last year, when gold and gold shares collapsed with everything else, is that the volatile times we are in might not make it easy for anyone. I would prefer that we were in a more stable world and that longer term strategies like buy and hold of gold. could be relied upon. But I fear that is not the case. I think the troubles with etf's have been greatly exaggerated. There's a piece on Zeal that does a reasonable job of debunking some of the more outrageous claims and fears. I wonder of you have read it?

"... the seasonal picture is still against Gold until August" - DrB. Thanks for the chart. I think mine must be a shorter period. From memory, mine shows the Jan-Feb. run-up and the Aug.-early Oct. run-up I dont recall run-ups in: May and mid.Nov-Dec, as shown in your chart. But, there they are! Something interesting here is the strong upward channel for the whole year == == BTW, while those here who like Gold have been waiting for Gold to vault through $1,000, I just clipped a nice quick 30% profit in less than 3 weeks trading other stocks. That is just as good as a jump to $1,300. So I had as good as a profit as that sort of jump, while Gold bulls here are still waiting. Best of all, 80% of my original investment is now sitting there in Cash. If I put it into GLD, and we see that sort of jump up, I have won twice, while others here win only once!

"The presence of these unpredictable natural phenomena, single-handedly rubbishes the workability of Elliot Wave theory. The poor record of Elliot Wave predictions does further damage. Respected randomness practitioners, mathematicians and Harvard professors alike have proven that it has no value." (Flashman) ===== Quote: http://www.housepricecrash.co.uk/newsblog/...ounce-22461.php Flashie is an idiot. I think he must good at "throwing away babies with bathwater"! EWI's record is "mixed", but it sometimes makes incredible calls. To me, it has value, and I pay attention to their forecasts - and Neely has made better calls that EWI's Prechter. One of GEI's posters, is off on a one year Round-the-World trip, courtesy of his trading profits in 2008, using EWI's trading signals. Neely's method is more complex, and I am still learning about it. I plan to buy his book and study it over time. (Maybe I can even try to get him to join a future GEI conference call someday.) An even more powerful combination might be to use Elliottwave in conjuction with Volume-driven signals, and astrology, as "pattern recognition expert" Larry Pesavento seems to be doing. I have been making a decent living using various technical trading methods alongside my own brand of fundamental analysis. I could tell you about the details of what I have done, but it might sound too much like bragging. And I would have to leave off a rather bad year in 2008, when I failed to act on some signals that I was getting, and stayed with a large Junior portfolio, and wound up riding it down through a very nasty correction in Junior mining stocks. A nice overall gain, but with a confidence-hurting "major drawdown" in 2008. As I see it: After 5-6 years of big annual profits, the Loss I made in 2008 are more of a comment on my own lack of trading discipline, than they are of failures in Elliott wave analysis or my other technical trading techniques. I do hope to show people that these tools can help produce outsized returns on a consistent basis. How are the following real-life statistics as a demonstration of what can be done: My "DB Portfolio" was started on the day of my Call of "the Bottom" on a GE Conference call that you can go back and listen to. It has showed: Some decent outperfomance of the rising SPX index. My 34.2% beats the index by 21.6% ! The current high cash levels (55%) I'm holding may help, if we see a brief pullback now, as I expect. HISTORICAL TRACK RECORD =================== Date==== Portfolio Value / Cash held & (Pct.) / + Change / SPX cls. / + chg. / Outpf ======= : ========= : ============== : ====== : ===== : ===== : ===== 05.Mar.09 : ..$ 237,301 .. : ..$ 000,000 (00.0%) + 00.0 % : 682.55 : 13.Mar.09 : ..$ 295,179 .. : ..$ 011,464 (03.9%) + 24.4 % : 756.55 : + 10.8 % : + 13.6 % 17.Mar.09 : ..$ 307,459 .. : ..$ 049,314 (16.0%) + 29.6 % : 778.12 : + 14.0 % : + 15.6 % 20.Mar.09 : ..$ 318,434 .. : ..$ 177,329 (55.7%) + 34.2 % : 768.54 : + 12.6 % : + 21.6 % Updated details, see thread in : GEI Member's section Brief. But if I can keep returns like that going, surely it demonstrates something good! (note: the above was posted on GEI's Neowave Warnings thread )

Hmmm. What would you think of this forecast then? 72 Years ! To celebrate NEoWave Institute’s 25th anniversary, we’re offering a 25% discount on Glenn Neely’s groundbreaking book: “Mastering Elliott Wave.” Still highly relevant and accurate, Glenn’s book changed Wave theory forever by presenting the first and only scientific, step-by-step approach to Wave analysis. If you don’t have Glenn’s book, now’s the time to get it! Click here to order “Mastering Elliott Wave” and receive a 25% discount. Offer expires March 31, 2009. Featured in the book is Glenn’s astounding 72-year market forecast In 1988, Glenn mapped out and published an unprecedented 72-year stock market forecast to the year 2060. His forecast declared: “… the minimum target of over 100,000 basis for the Dow … should be achieved no later than 2060.” In 1988, the Dow Jones Industrial Average hovered at 1900. Over the next two decades, the Dow increased more than seven-fold. After reaching its 2000 high, the stock market began (according to Glenn) a 15- to 20-year bear market consolidation, which is right in line with his long-term forecast. It’s important to note his 1988 forecast offers no alternate wave counts or backup bearish scenarios. Glenn’s 72-year forecast presents only one scenario, which has been on track for 20 years – an extraordinary feat, especially given that orthodox Elliott Wave analysts have altered their forecasts repeatedly throughout the last 20 years. This is the only long-term Wave forecast that remains accurate today, which proves Glenn’s NEoWave technology is superior to orthodox Elliott Wave. Remember, this 25% discount on Glenn’s book expires on March 31. Click here to order “Mastering Elliott Wave.”

From the "Dash" link, just below the Logo: ========== "Possible low in Gold on 3-18 near Gold-$380 - but I am still a skeptic." My GLD chart worked pretty well in identifying a possible low yesterday, but I was too busy to trade on it As Tom Obrien said, there was heavy volume on the new low in GLD, so "we are going back down there." I think this was a news driven jump, in a market that has not yet fully corrected. There's a good chance it will drift back down IMO. Especially if stocks stay strong and attract money away from precious metals.

(From GEI's Dashboard, an accurate view on Gold ? ): PRECIOUS METALS + Bubb's view, including targets: I think Gold can correct to GOLD-$850 (GLD-84) to fill the Gap down there. If gold jumps above Gold-$945 or so, I am probably wrong. If it drops from here, I expect Gold to be stuck in a trading range out to July-August. + Counter-opinions : (I am looking for an up-to-date, and articulate counter-opinion. Please offer one, or suggest one.) = = (CAN YOU provide the counter-opinion?): http://www.greenenergyinvestors.com/index.php?showtopic=6254

I'd like to announce that the (next Friday or Saturday's) GEI Conference Call will focus on UK Property Join us, if you are interested. Last Call can be heard here.

THIS BREAKOUT in stocks, will pull down Gold and gold shares IMHO. I see it going on for MANY more days, and may take SPX up to 1,000 potentiallly. We nailed the timing on the recent GEI conference call. Pity more here were not involved.

A popular bit of fear-mongering IMHO (in response, I posted this rebuttal): Actually, you have this backwards. The risk amounts for OTC derivative are massively OVER-COUNTED as I have revealed in two articles - and my arguments have not been refuted. 1/ "Fighting the Fear" - Preventing a meltdown in OTC Derivatives Moneyweek article / credit risk on OTC swaps : http://www.moneyweek.com/investments/stock...-to-us-all.aspx 2/ There's a longer and more-detailed version, here : http://financialsense.com/fsu/editorials/2008/0605.html I know that people would rather see a huge consipricy here. But in the long run, the truth will serve you better.

Very well done, DD. Indeed your calls were great in a year of tough markets

Great chart too!

That's true. However, most of these gaps will get filled eventually IMO As I like to say, "Gold Trading outside NY trading hours tends to be unimportant"

I have been warning people they should lighten up on gold for 2-3 weeks now A parabolic move. That wont be bullish, if they suddenly decide it is safe to go back into the stock market, and they sell their gold to buy stocks.

"The quid pro quo is that Lloyds will stump up some extra mortgage funding and small-business loans. Quite apart from anything else - such as how to identify what counts as ‘new’ lending that would not have happened without this Government generosity - houses are still overvalued and ought to be allowed to find their proper level. Why on earth is the Government using taxpayers’ money to bribe a large bank to puff up the house-price bubble once more? This is all a terrible mess. This Government’s economic policy has proved a one-trick pony - the only ‘success’ Ministers understand is a debt-fuelled consumer and housing boom, and to return to that land of lost content they will throw around any amount of our money." The Obvious Reason: To save GoNowGordon's backside, and to preserve Labour's hold on power. What else could it be? House orices are too high. Propping them, just delays the inevitable, and wastes money

Currently, I think $850 is pretty likely. But I will watch and see how it goes. If the volume is right it could finish higher. Or if too heavy, then maybe all the way back to $680. At this stage, I find Neally's $500 hard too believe

(I am not sure what Glenn is saying now - but this seems relevant here): BOB PRECHTER of Elliott Wave International has just suggested to "cover all shorts", since being 200% short from July 2007. Here's a summary of his comments: "We are able to tell from the put/call ratio and other indicators that the majority of investors thought the period from October 10 to year-end 2008 was the major market bottom. But over the past four months EWI have repeatedly stated without equivocation, that the market required a fifth wave down. There were no alternative counts. The Wave Principle virtually guaranteed lower lows, and now we have them." Here's a summary of the reasons that he has suggested to cover shorts: 1) We need to be smart bears, not pigs. If we exit now, we can hold onto profits 2) Wave 5 (of a bigger 1, if that's what this is) is approaching its minimum target. SPX-600 is an ideal target, but this could end above that, and very soon. The rebound after will be sharp and swift. Let's be early rather than late. 3) Sentiment is now massively bearish - with only 3% bulls last Friday. That's the sort of environment the generates big rebounds 4) We need to stay focussed on keeping money SAFE