Wednesday, April 23, 2014

Housing Disappoints… China Manufacturing Contracts…Stocks Above their 200-dMA Suggests Trouble-Maybe

NEW HOME SALES FALL -1 (Briefing.com)
“New home sales declined 14.5% in March…Affordability concerns from higher mortgage rates and higher new home prices could stall further sales.” Full story at…
http://www.briefing.com/Investor/Calendars/Economic/Releases/newhom.htm
Housing is considered to be an important predictor for recession.

HOUSING DISAPPOINTS - 2 (Zerohedge)
“Q. Why did new home sales crash in all regions except the traditionally coldest, wettest, and snowiest Northeast, where sales rose?
A. Uhm, because it obviously snowed everywhere except in the Northeast.
And there you have it: spin 101 for braindead zombies and vacuum tubes. Commentary and chart at…
http://www.zerohedge.com/news/2014-04-23/explaining-horrendous-home-sales-report-it-snowed-everywhere-northeast

CHINA MAUFACTURING CONTRACTS AGAIN (Global Economic Perspectives)
“Chinese manufacturing remains in contraction for 2014. Output and new orders were down for the 4th consecutive month, but at a slightly reduced pace according to the HSBC Flash China Manufacturing PMI.”  Commentary at…http://globaleconomicanalysis.blogspot.com/2014/04/china-manufacturing-output-and-new.html
China is important for the world’s economy.

DIVERGENCE IN THE % OF STOCKS ABOVE THEIR 200dMA
As shown below, the percentage of stocks above their 200-day moving average has been declining while the NYSE Composite Index has been advancing.  This divergence appears to be trouble for the markets, especially if the percentage drops below its mean of 61 and continues down.