Tuesday, November 26, 2013

Housing Market Still Hot

The market is slightly higher again in early trading.  Yesterday's session was fairly lackluster, and today's is starting out similar, but the market still refuses to go down in any meaningful way.  The week of Thanksgiving is typically a strong seasonal period for the market, but with stocks already up so much coming into this week it seems unlikely that stocks would stage another big rally from here.

More typical of the way this year has gone is for the market to go into a period of sideways consolidation before taking another stair-step higher. 

The housing market is a bright spot today after the Case-Shiller Home Price Index rose another 13.3% in September following a 12.8% increase the previous month.  This data lags a bit, so it will be interesting to see how October and November have fared.

Separately in economics today, the consumer confidence reading for November slid to 70.4 from 72.4 last month.  Today's reading was below expectations.

Markets in Asia were mixed overnight.  A PBOC official commented that domestic inflation in China is stable and that they should have no trouble growing at 8% in the coming years.

Europe's markets are mixed today.  An ECB member said that interest rates will remain low for an extended period as the recovery remains weak and fragile.

The 10-year yield is easing back further to 2.70% today.  Last week it topped at 2.83%, but the intermediate-term trend remains higher.

Gold prices are slightly higher near $1245 and oil prices are also up today to $94.25.  On CNBC, Dennis Gartman predicted crude prices will continue to slide along with lower prices at the pump.  Let's hope he's right.

Trading comment: Most stocks still look extended on their charts after the recent rallies we have seen.  One stock that has been consolidating for the last month is AAPL.  It has mostly traded sideways since reporting earnings and now actually looks like it is poised to breakout and head higher.  AAPL's higher after reporting earnings was $539.  Today it is at $529, so not too far away.  We have been adding to our AAPL positions a little bit here and there, but this one could be a nice play into year end as folks look for catch up stocks that haven't run too much recently.  I also expect that AAPL should have a strong holiday season now that its product lineup is refreshed.  I know that I am in the market for a new iPad since mine is a few years old and one of my kids is ready for an iPad mini too.

KAM Advisors has long positions in AAPL


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