THE DOT - if this turns orange or red be alert

Monday, April 26, 2010

part 2

3. The foreclosure storm is gathering but still ignored by the market as we still have a go to hell with the reality attitude by the performance driven trap the manipulators have fabricated. 1.1 mio foreclosures executed and close to 5 mio 60 days behind ( make the math 5 mio with a minimum average 1000 Dollar per month payment behind matches 5 billion per month which will explain part of the consumer purchases adding up to 60 bil per year). These are new records and add up to the losses banks will have to write down by a multiple factor of those 60 bil as the market value of the house or condo will rather be down by 4-5 times that amount plus CRE losses - hence we are talking 500 bil in losses banks have to absorb. ın Europe that will be burdened with huge sovereign bond losses with Greece just a warm up as Italy and other PIIGS are at the brink to follow swiftly.

From The Daily Capitalist

In a piece from the Wall Street Journal on Saturday, LPS Applied Analytics estimated that foreclosures would create so much market supply that it would take 103 months to liquidate it.

As of March, banks had an inventory of about 1.1 million foreclosed homes, up 20% from a year earlier, according to estimates from LPS Applied Analytics. Another 4.8 million mortgage holders were at least 60 days behind on their payments or in the foreclosure process, meaning their homes were well on their way to the inventory pile. That “shadow inventory” was up 30% from a year earlier.

Based on the rate at which banks have been selling those foreclosed homes over the past few months, all that inventory, real and shadow, would take 103 months to unload. That’s nearly nine years.

The HAMP (Home Affordable Modification Program) program started by the Obama Administration is trying to modify loans so that lenders will not foreclose:

According to Goldman Sachs, HAMP started less than 80,000 trial modifications in March, less than half the number in the peak month of October 2009. At the same time, a growing number of modifications are being canceled as borrowers prove unable to pay. By Goldman’s count, about 68,000 were canceled in March.

All this means that little can stop banks’ inventory of distressed homes from growing. Too many people owe too much more on their homes than they can afford. For the housing market, that could mean a long-lasting hangover.

4. One of my favorite sentiment instruments are the ISEE MAs who can max out to 150 levels for the 10 and even 20 day MA but such levels would rather mark ultimate turning points for 30-50 percent declines. which might not happen right away as the manipulators want to unload their hundreds of billions to the public which is called distribution and will take months to accomplish but for now around the 200 week MA of the SPX at 1220 we should enter a correction mode with a 1050 target max. to the downside. only an attack of Israel on Iran would alter that scenario but ı doubt they do that before the mid term elections since that would jeopardize the whole bull-campaign manipulation

TimeCallsPutsTotalISEE
12:10306599176037482636174
11:50289011153897442908188
11:30270123136039406162199
11:10245090114191359281215
10:50197054103776300830190
10:3015464792654247301167
10:1012893678239207175165
09:507487554266129141138
All Equities Only
CallsPutsTotalISEE
249067102839351906242
23457991426326005257
21824182234300475265
19935962717262076318
16336456024219388292
12418447576171760261
10352139515143036262
580452439182436238
All Indices & ETFs Only
CallsPutsTotalISEE
574687317313064179
543906244611683687
518525378110563396
45701514519715289
33660477298138971
30445450617550668
25397387076410466
16817298604667756


Note: All times are 24-hour Eastern Standard Time

Historical

ISEEDate
Previous Trading Day14404/23/2010
10-Day Moving Average13604/12/2010 - 04/23/2010
20-Day Moving Average13403/26/2010 - 04/23/2010
50-Day Moving Average12502/11/2010 - 04/23/2010
52-Week High18504/15/2010
52-Week Low6701/26/2010

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I am a professional independent trader