Monday, November 18, 2013

Economist predicts long, painful housing correction in Canada

Canada's existing home sales fell 3.2% in October compared to September, according to the Canadian Real Estate Association. No big deal right? After all housing sales were brisk through the summer and bigger picture-wise Canada's housing market has been on a near-constant upward trajectory since 1997, hitting all-time highs on a regular basis.
While bearish commentary from most Canadian economists who has been scarce, other institutions, and media outlets many of them outside the country, have been sounding a warning call for some time. Goldman Sachs, International Monetary, The Economist and the Financial Times have argued the Canadian market is overcooked and ripe for a correction.
David Madani, Canada Economist with Capital Economics in Toronto has been bearish on the Canadian housing market since 2011. He believes Canada is in for a prolonged and painful correction that could see prices fall by as much as 25 percent.
That would be comparable to the last time the market crumbled in 1989/1990, which dragged on for the better part of a decade.(more)

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Trulia Inc (NYSE: TRLA)

Trulia, Inc. provides tools to research homes and neighborhoods for consumers through Web and mobile applications. The company, through its tools, also enables real estate professionals to market their listings. It provides subscription and free products for real estate professionals, as well as sells display media advertising. In addition, the company offers information on schools, crime, neighborhood amenities, home values, and other communities. It serves buyers, sellers, and renters. The company was formerly known Realwide, Inc. and changed its name to Trulia, Inc. in September 2005. Trulia, Inc. was founded in 2005 and is headquartered in San Francisco, California.
To review a current H&S pattern on Trulia's stock, please take a look at the 1-year chart of TRLA (Trulia, Inc) below with my added notations:
1-year chart of TRLA (Trulia, Inc) TRLA had rallied from a low of $15 last November to a peak of $52.50 in September. Over the last 3 months the stock had created a very important “neckline” of support at $40 (blue). Above the neckline you will notice the H&S pattern itself (green). Confirmation of the H&S occurred earlier last week when TRLA broke its $40 “neckline”. So, the stock should be moving lower overall from here.

The Tale of the Tape: After rallying higher for (10) months, TRLA confirmed a head & shoulders pattern. A short trade could be entered on any rallies up to or near the $40 area. A significant break back above $40 could negate the forecast for a move lower.
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My System Signals It's Time to Sell Italy, Buy Spain: EWI, EWP

Europe continues an uneven economic recovery, but the stock markets of that region do have significant trading potential. This week, my 26-week rate of change (ROC) system is rotating from one European market into another.
Eurozone GDP data helps explain why the European Central Bank (ECB) recently surprised investors with an interest rate cut. Economic growth was lower than expected, and expectations had actually been very low to start with. GDP grew just 0.1% in the third quarter, down from the 0.3% expansion of the second quarter.
Germany led the eurozone with an expansion of 0.3%, in line with expectations but down sharply from the 0.7% growth of the previous quarter. Italy also met expectations with a decline of 0.1% for the quarter, the ninth straight quarterly contraction. Over the past 12 months, the Italian economy has contracted by 1.9%.
On the news, European markets were generally weak. The reaction to the news about Italy's mediocre performance caused my 26-week rate of change (ROC) system to issue a sell on iShares MSCI Italy Capped (NYSE: EWI). The relative strength (RS) rank of EWI also dipped below 70, which reinforces the sell signal.
EWI Chart
While EWI has delivered a sizable gain this year, it is down about 4% since my system signaled a buy in mid-October, and the ETF is still more than 50% below its 2007 high. U.S. stock markets have fully recovered their bear market losses, but European stocks are struggling to regain ground in a slow economy. (more)

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Japan Will Collapse Very Soon.. The U.S Market And Europe Will Follow

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2 Top Tech Stocks for 2014: Qualcomm Inc. (Nasdaq: QCOM), Vringo Inc. (VRNG)

Around mid-December, financial analysts and commentators from all over will start releasing their forecasts for the upcoming year.

Whether it’s the economy, stock market, top trends, or companies — few areas are off limits.

That’s great and all. But for me, it’s not quite good enough… I mean, why wait until December?

You and I both know that when it comes to technology, the smart money is in before the rush. So let’s not hang around till next month and end up following the masses. Let’s get ahead of the curve instead.  (more)

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US Weekly Economic Calendar

time (et) report period Actual CONSENSUS
10 am Home builders' index Nov.   55 55
8:30 am Employment cost index 3Q   0.5% 0.5%
8:30 am Retail sales Oct.   0.0% -0.1%
8:30 am Retail sales ex-autos Oct.   0.2% 0.4%
8:30 am Consumer price index Oct.   0.0% 0.2%
8:30 am Core CPI Oct.   0.2% 0.1%
10 am Business inventories Sept.   0.4% 0.3%
10 am Existing home sales Oct.   5.10 mln 5.29 mln
2 pm FOMC minutes 10/30      
8:30 am Weekly jobless claims 11/16
334,000 339,000
8:30 am Producer price index Oct.   -0.1% -0.1%
8:30 am Core PPI Oct.   0.1% 0.1%
8:58 am Markit flash PMI Nov.   -- 51.8
10 am Philly Fed Nov.   16.5 19.8
10 am Leading indicators Oct.   --  
10 am Job openings Sept.     3.9 mln
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