Two Ways: Home Sales, Prices Cave In
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After rising unexpectedly in December, sales of existing homes dropped 5.3% in January, reaching their worst levels in over a decade. According to the National Association of Realtors, purchases fell to 4.49 million in January, and the median home price dropped to a 6-year low of $170,300.
This comes on the heels of an S&P/Case -Shiller announcement Tuesday that the price of single-family homes dropped 18.5% from a year ago. This is a closely-monitored gauge that, according to the New York Times, is leading many economists to believe buyers will continue to delay purchases in hopes of still lower prices.
For more trading perspective, see Professor Smita Sadana's This Bear Fiercer Than The Last.
From the Bull Pen: Bulls can look to oil plays rather than housing. One can consider a play Professor Jeff Cooper mentioned on the Buzz today: Transocean (RIG), which "left an outside day down on Monday, but gave no follow-through and held above its 50 DMA." One can set a sell stop below that level ($53.50).
From the Bear Cave: Housing Bears can look to reload on the downside should the Real Estate ETF (IYR) rally to $30. If and when.
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