- Just when the hedge funds and the algos panicked last week, stocks predictably found support at the 200-day moving average for key indices and indicators such as the New York Stock Exchange Advance Decline line.
- Given the fact that the inmates (algos) are now running the asylum, any buying should be done in a measured way with the full knowledge that any bounce may be short lived and that until proven otherwise, the odds of the markets making significant new highs are unknown.
- Complexity and supply and demand are lining up in a favorable pattern for homebuilders.
- Barring an all-out MEL (markets, economy, people’s life decisions) crash, the homebuilder stocks are more likely to move higher over time than other sectors because the supply and demand equation is in their favor.
- If VIX breaks out to new highs and SPX breaks down, expect things to get worse in the short term.
For further details see:
The Stock Market May Be Bottoming But The Odds Of Success Are Difficult To Gauge