New home sales at 7 yr low, Price bounced from moving averages --> BUT no trade! why?
5 min Emini Nasdaq 100
Hi,
Market gapped up today and closed it almost immediately, price then proceeded in a zig zag sluggish manner... I didn't like the way price moved....
Although my signals told me to go long when price dropped to the pink moving average, ( green circle above), I did not make a move.. The risk is too great... judging from the movements in the morning sessions, and where the highs are, there isn't enough room for a large enough bounce back...
I decided not to risk anything.. and stayed out.. NO TRADE TODAY.
Fundamentals:
New-homes sales tumbled in August to the lowest level in seven years, a stark sign that the credit crunch is aggravating an already painful housing slump.
Sales of new homes dropped 8.3 percent in August from July, the Commerce Department reported Thursday, driving down sales to a seasonally adjusted annual rate of 795,000. That was the lowest level since June 2000.
"This is just hideous," said Ian Shepherdson, chief economist at High Frequency Economics.
The home sales report came on the same day that the government reported a relatively brisk business growth rate in revised figures for the second quarter. But the 3.8 percent pace was less than previously estimated and it occurred before the credit crisis and its repercussions across the broad spectrum of the economy had taken hold.
Home prices tanked.
The median sales price in August fell by 7.5 percent from a year earlier to $225,700. That was the biggest drop in percentage terms in nearly 37 years. The median price is the middle point at which half sell for more and half for less. The average sales price dropped by 8 percent in August from a year earlier to $292,000. That was the biggest decline in 17 years.