VIRDIGO INVESTMENTS (closed positions only):
MARKET MOVING EVENTS:
1) ECONOMIC: NEW HOME SALES
‘In an unsettling setback for an already unsteady housing sector, new home sales fell very sharply in March, down 14.5 percent to a 384,000 annual rate that is far below the Econoday consensus for 455,000 and far below the low end estimate of 440,000. Revisions offer a marginal offset, with February and March revised upward by a combined 19,000.
Prices, arguably unsustainably high prices, are a major factor constraining sales of new homes, as they are for sales of existing homes. The median price surged 11.2 percent last month to a record high of $290,000. Year-on-year, new home prices are up 12.6 percent. This compares with a year-on-year decline in sales — not gain in sales — of 13.3 percent.
Low supply of homes on the market has also been constraining sales although this factor, because of the decline in sales, eased sharply in March. Supply relative to sales rose to 6.0 months, well up from 5.0 and 4.8 months in the prior two months and compared against 4.2 months in March last year.
Regional data show sweeping declines across the Midwest, West, and South. The Northeast, which is by far the smallest market for new homes, shows a gain. The Dow is moving to opening lows in immediate reaction to today’s report.’
VIRDIGO STATEMENT: Wednesday appeared to be a consolidation day in the market. Major indexes held up well compared to other leading sectors.
SPX: Still searching for the elusive SPX1900. The MACD is still firmly in positive territory with a bullish posture. The MACD also has not reached extreme levels yet.
VOLATILITY:The VIX:VXV ratio looks like a turn is possible as the MACD is turning hard without an actual crossover. Extreme levels have not been reached yet which would mark a Market Top (short term).
LEADING INDEXES: A DEFENSIVE day in the market with the major indexes holding up better than the leading OFFENSIVE sectors (typical consolidation).
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