Weak Home Sales Could Weigh On Economy

Yesterday's action was again disappointing, and another example of why I don't like to see strong opens. The market was nicely higher in early trading, but completely faded by the end of the day to close in negative territory.

You can see on the chart below that the S&P was getting close to its overhead 50-day, which I think will act as resistance, and might have already. The index is now back sitting on support at its 200-day, which will remain a key level to watch.

This morning, the market opened a little weak following weakness in the euro and overseas markets. The weaker than expected existing home sales report for May (-2.2%) didn't help improve sentiment any either. Home sales are an important metric for the economy, and their weakness could have pronounced effects on consumer sentiment and the economy going forward. Yesterday Meredith Whitney cited her conviction that housing would continue to be a problem.

Commodities are lower today, after yesterday's big rally. Oil is lower to $77.50 and gold has fallen to $1232, but is stabilizing.

Asian markets were mostly lower overnight, but China eked out a small gain; the 10-year yield is lower to 3.21%; and the VIX is down slightly to 24.82 after a reversal higher yesterday.

long GLD