Has S&P 500 Reached The Short Term Top?

Despite better than consensus data on US housing suggesting recovery in housing prices and better than consensus consumer confidence the market failed to rally.

Chart 1. S&P 500

S&P 500

S&P/Case-Shiller U.S. National Home Price Index rose 2.9% in Q2 compared with Q1. Average home prices are still down 30.2% from their top. Despite one can argue that the pickup in prices is influenced by seasonal effects and government measures it’s one of first measures that show some meaningful improvement. Of course we have to keep in mind that the backlog of unsold homes is still at 9.4 months sales vs. 4 months normal level and we are far away from norms, but it looks the market is consolidating.

Chart 2.

S&P Case-Shiller National Home Price Index

Consumer confidence came out at 54.1 up from 47.4 in July. I find these kind of indicators useless, but looks like it sometimes moves the market, so I take a look.

The market looks little bit tired, the volumes are still low. Bankrupt companies like AIG, FNM, FRE are recording large volume and price increase. Feels like we are at the short term top as positive news can’t move the market higher.

, , , , ,

This entry was posted on Wednesday, August 26th, 2009 at 2:59 am and is filed under Markets. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

Comments are closed.


Get Adobe Flash player