Sunday, November 2, 2008
HGX (housing index) technical outlook
The HGX is one of the most mature bearish sectors and we had a significant price swing from the current low at 70, roughly 30%. In weekly terms, we are in a (setup) 5 count, which is usually a counter move week but, as for the BKX, I doubt we have the low in yet. This is in best case a zigzag pattern or wave 4 of this leg. In any case, we need to go lower once again to finish this overall downwave pattern which should happen within 3-4 weeks. Fundamentally, the housing sector will be in trouble for a long time with plenty inventory left to sell and that is a trailing momentum with the jobless rate still low - rather to stay as is or even worsen. The market is not about the facts, it is more about expectations, hope and fear. The zigzag pattern should stay in a 65-95 range for now.
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- getagrip
- I am a professional independent trader
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