New Homes Sales down 3.9% --> Subprime worries --> Market Tank --> $740 profits
5 minutes Nasdaq Emini 100 Candlestick Chart
Hi,
The market has been quiet the past week... and it remained quiet,, characterized by small movements before the new home sales data announced at 10:00 am.. Even before the announcement, price showed some signs of breaking down.... it broke all the moving averages immediately after the announcement and I shorted 1 contract at 1813... and 2 more contracts at 1809... price really plunged at the worse than expected new home sales figures...
there was some pull back along the way but I basically ride it through as I was expecting a major pullback... However, at 10:40, price starte to some some signs of a real pull-back... and I exited at 1798 to protect my profits.. This trade profited $740...
Fundamentals:
sales of single-family homes dropped 3.9 percent last month to a seasonally adjusted annual rate of 848,000 units, the slowest pace in nearly seven years.
The decline followed a 15.8 percent plunge in January, the biggest one-month decline in 13 years.
The weakness in sales was accompanied by a drop in prices with the median price of a new home falling to $250,000 in February, down 0.3 percent from a year ago.
The report was far weaker than Wall Street had been expecting and raised concerns that rising mortgage delinquencies and foreclosures, especially in the subprime market, would further depress housing activity in the months ahead as nervous lenders tighten their standards.