There were more data points today than just housing; however, the housing sales report stole the spotlight again. Additionally there were the LEI and weekly unemployment reports.
The LEI data was better than expected but I'm not surprised. After all, a good portion of the Leading Economic Indicators is controlled by the Federal Reserve: money supply. Therefore it should come as no surprise that a sizable slice of the reason for the better reading was indeed the Feds rampant increase in the money supply. Is this supposed to be good news? Not so much!
The weekly unemployment data was terrible again. If coming in 15,000 worse than expected wasn't bad enough, the prior week's data was - as usual - revised WORSE. No sense in the Ministry of Truth telling the truth "now," when it can reveal the truth "later," and keep the market happy at the moment of the actual release time. What a joke.
"Existing Home Sales exploded 7.6% last month so you should buy buy BUY!" or some other such tripe is all that was heard on today's financial shows. Rarely did they tell the whole story.
Expectations were for a 4.10 million sales pace and it came in at 4.13 million. Hardly an inspiring "beat." If it weren't for last month's horrifying (and ignored) data, it was the worst sales data - EVER. Distressed homes rose to 34% of sales in August from 32% in July; they were 31% in August 2009. Moreover, there is still a full year of unsold inventory...that we know of. The shadow inventory being held back by the banks may be twice as large.
In other news; Blockbuster filed Chapter 11 bankruptcy, Ireland officially is in a double-dip recession, Germany missed manufacturing expectations badly, and Senate Democrats refused to vote on tax cuts until after the November elections.
This last bit of news hit the tape in the afternoon, just before the late sell-off. Hmm, I wonder if they were related?
Previous Day's Trading Room Results:
Trade Date: 9/23/10
E-Mini S&P Trades*
(before fees and commissions):
1) VA buy @ 10:21am at 1128.75 = +2.50 (1)
2) Algorithm positions (4)
3) “Reading the Tape” positions (1) combined Secret’s, Algo, & “Reading the Tape” total… +3.50
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