Home Sales Down, Rounding Top --> Short --> $700 profits
5 min EMini Nasdaq 100
Existing home sales numbers were released at 10:00 am. It was bad.. but the market rallied... I missed this trade... but from 11:00 till 13:00, I could see price action topping out... there simply isn't enough momentum to carry price through...
There is a rare pattern of the rounding top today... This was accompanied by a downturn in stochastics... However at that point in time, I still couldn't tell that it was a rounding top... I had to wait till around 13:50 for price to break below the moving averages before I had enough conviction to go short..
I shorted 1 contract at 1950 and another 2 contracts at 1945.. after that, price juse shot past below the low established during the morning session and I was ready to get out at 1935 with profits of $700.
Fundamentals:
Sales of existing homes fell for a third straight month in May, dropping to the lowest level in four years as the median sales price declined for a record 10th consecutive month.
In a troubling sign for the future, the inventory of unsold homes shot up to the highest level in 15 years, meaning more downward pressure on prices in the months ahead until the inventory glut is reduced.
Sales fell by 0.3 percent in May to a seasonally adjusted annual rate of 5.99 million units, the National Association of Realtors reported Monday. Sales now stand 10.3 percent below where they were a year ago.
The median price of an existing home sold last month fell to $223,700, down 2.1 percent from a year ago. It marked the 10th straight price decline compared with a year ago, the longest stretch on record.
After rising more than 100 points earlier in the day, the Dow Jones industrial average lost those gains to finish down 8.21 points at 13,352.05.
The drop in home sales was in line with expectations, providing relief on Wall Street where analysts had been braced for an even worse showing.