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The charts, graphs and comments in my Trading Blog represent my technical analysis and observations of a variety of world markets...
* Major World Market Indices * Futures Markets * U.S. Sectors and ETFs * Commodities * U.S. Bonds * Forex

N.B.
* The content in my articles is time-sensitive. Each one shows the date and time (New York ET) that I publish them. By the time you read them, market conditions may be quite different than that which is described in my posts, and upon which my analyses are based at that time.
* My posts are also re-published by several other websites and I have no control as to when their editors do so, or for the accuracy in their editing and reproduction of my content.
* From time to time, I will add updated market information and charts to some of my articles, so it's worth checking back here occasionally for the latest analyses.

DISCLAIMER: All the information contained within my posts are my opinions only and none of it may be construed as financial or trading advice...

Dots

...If the dots don't connect, gather more dots until they do...or, just follow the $$$...

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NOTABLE POSTS WITH IMPORTANT UPDATES...

Tuesday, January 31, 2012

House Prices Still Under Water

Data released today shows that house prices fell from the prior month's level and still remain in negative territory, as shown on the graph below. Since it's a "leading indicator of the housing industry's health because rising house prices attract investors and spur industry activity," the weak price levels just confirm the depressed state of new home sales, as mentioned in my post of January 26th.


The Daily chart below of the Homebuilders ETF, XHB, shows negative Stochastics and MACD divergence and that a topping process may be underway. Near-term support sits, first, at the confluence level of monthly Volume Profile POC and monthly VWAP of 18.58, and then at the -2 monthly VWAP level of 17.65. Near-term resistance is at the +2 monthly VWAP level of 19.50.


As this ETF has had a strong run from its October 2011 lows, it remains to be seen as to whether it runs out of favour on the buying side any time soon.

The Monthly chart below shows that this ETF has been slow to recover from highs made in 2006, and has made a rough triple top formation, beginning from the April 2010 highs. Resistance on this timeframe sits at a Fibonacci confluence of level of 20.00...a very important level for the bulls to break above and hold. However, with data like we've seen of late, it makes such a bull case very weak, in my opinion, and I would not look to this sector to lead the general markets higher.