Watch For End of Day Rally

pending home salesRecently during days of flat trading, markets have been finding a trend of last minute rallying into close. I would definitely be on the lookout for such a closing today, as once again the volume is remaining very light.

Real estate REITS are on fire today, which are mostly due to the big jump in pending home sales data that was released today. One thing that doesn't make sense, is that residential and commercial real estate are in completely different markets and are experiencing completely different economic pressures. A seasonal jump in pending home sales has no effect on the large suffering in the commercial sector. However, ignorant investors see some connection as pretty much all REITs were on fire today, which as a result crushed SRS.

The markets are dangerously flirting with complete craziness as despite continuing destructive data, markets keep going up. Despite the home sales, today's personal income number came in at -1.3%, which was worse than analysts expected. Out of all the data released, personal income is by far the strongest that directly contributes to the direction of GDP. Considering personal income has dropped so far just in a month, I am very surprised we did not see a more negative reaction from the market. 'Tis the market we are currently in.

This rally can't last much longer, oil's performance separation with stocks shows that indeed commodities may be a bit overbought (what isn't at this point?!). I will probably be pulling the trigger on some DIG puts as well as FAZ shares and maybe URE puts before close today.


  1. McBalls Says:

    Seriously FF, do u think the worse is behind us already? Don't you think strong concerted efforts taken by governments around the world have prevented a possible catastrophic financial meltdown?

    Markets are extremely forward looking hence pricing in expectations dynamically. It has always moved ahead of improving economic fundamental data.

    You shld read this letter from Daniel Loeb.

    Good luck!

  2. Anonymous Says:

    The link doesn't work dumbass. Hopefully you trade better than you write e-mails.

    Go Jerk Off!

  3. Anonymous Says:

    DIG? FAZ? That sounds like a great idea. Bet against this market right now. Genius!

    We're do for a pullback in the next week or two but this market isn't going to hit the skids as long as everybody believes things are not getting worse.

    This train is moving forward and I wouldn't get in it's way...

  4. Anonymous Says:

    Yeah, I agree with the previous commentator. Anyways, you seem to be a smart guy, but, I don't get your fixation with the bear side of the things. I mean, the market reacts the most from worst to less worst. We all have a feeling you made tons (or most of) the money on the down side last year and until last March, but missing these big upwards movements the way you do brings up one's questioning...

    As I read your daily posts, sometimes I was just wondering if you have some interests in scaring people, and whether you're actually doing the opposite. I am referring to your sayings so often that you do not under how come the market reacted they way it did. Well, maybe it's just your perception of things.

    Anyways, sorry to say this, but this website should be called something like "Making money during a recession on the way down!"

    I'm just being honest here, just my opinion because I'm so amazed by your bear view of the market.


  5. Anonymous Says:

    Yup - gotta make hay while the sun is shining.

    And re: the comment about REIT's being bought up by ignorant investors based on housing data, its not about that at all. The intervetion of govt's around the globe has averted the credit crisis and this is great news for REIT's. I certainly would short them at this point, there's a ton of upside potential.

  6. Anonymous Says:

    oops - above I meant to say I would NOT short them...

  7. Anonymous Says:

    someone shares F.F opinion!

  8. McBalls Says:

    1st Anon: u're prob FF in disguise swinging a non constructive (as always) cheap shot. At least i started a meaningful discussion going and helped increase the number of comments on your non-value added post giving u more survival hits. If u're not FF hiding behind an anonymous nick i apologise for that association.

    Anyway here's the link again loser.

    And check out today's trading on HUGE VOLUME. You got to respect the market then subscribe to a simplistic "government manipulation" view. (you really think there are goblins funded by the fed hiding behind bloomberg terminals hitting offers to drive up all index stocks?! the entire reserves will dry up within a week)

    Good luck trading.

  9. Anonymous Says:

    The Bottom line is, that the bulls are in control,and this low volume argument does not hold water.Doesn't ETF volume count? Look at it!!!/.. buyers want in this market regardless of news and on any pullback they are coming in and have been heavily for the last 3 months.. The bears last chance was 950.. The market is going higher so face the music,, I do beleive we will run out of gas before 1100 and ultimately make an attempt in the fall at a retest.. Elliott wave count is most likely wave 1 of a new bull market, but most ellioticians still beleive we are nearing the end of wave 4 and will make new lows with wave 5.. Good luck all because we are going to need it..



    Nice rally