Despite the tepid start to the trading week last week, the bullish finished strong, taking all the major indices above some major technical resistance lines.
Granted, Friday’s bullish move was more than a little overheated, with the opening gaps leaving the market vulnerable to a pullback that may well serve to start a corrective move. But, it’s interesting that the market was able to muster that much bullish interest on what was (frankly) less than truly bullish prompt.
We’ll talk about the risks and rewards of the current situation below, right after a quick wrap-up of last week’s and this week’s major economic numbers.
Economic Data
It wasn’t an especially busy week last week in terms of economic news, but it was a significant week for real estate data.
The flurry of housing news started on Monday with the NAHB Housing Market Index, which advanced to 64 from September’s score of 61. But, the party got started in earnest on Tuesday with September’s housing starts and building permits. Though permits fell from a pace of 1.1161 million units to 1.103 million, starts ramped up from August’s pace of 1.132 million to 1.206 million… almost a multi-year record high. Regardless, both pieces of data continue to climb in a healthy manner.
Housing Starts and Building Permits Chart
Source: Thomas Reuters
On Thursday we got updated FHFA Housing Price Index and existing home sales figures, both of which also pointed to an increasingly strong real estate market. The FHFA Housing Price Index said home prices were up 0.3% for the month, and up 5.5% compared to August-2014’s numbers. And, existing home sales were cranked up to an annual pace of 5.5 million houses… the second highest pace since 2007 (when the number was falling).
Those two uptrends also say the housing market is solid.
Existing Home Sales and FHFA Housing Price Index Chart
Source: Thomas Reuters
Everything else is on the following grid:
