A Forex View From Afar

Case-Shiller: That Housing bottom is not here

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Another release for the housing market, the S&P/Case-Shiller Home Price Indices have recorded the biggest decline since the Index was started 20 years ago. Housing prices had declined further, now reaching a 14.1% decline since last year, without having a bottom in the sight.

Out of 20 metropolitan areas, 19 show declines, Charlotte being the only one with a modest 0.8% gain since last year. In 6 areas prices have fallen more then 20% since last year.



If we add that Housing Inventories, released last week, reached yet another record of 11.3 months, we could say the Bottom in the Housing Market isn’t anywhere in sight, although it could give a huge push forward to the economy, and especially for the Dollar, once the bottom is set and the recovery phase begins.

Another big winner in the housing market recovery will be consumers; it will noticeably increase their confidence due to the housing-welfare relationship. By the way, Consumer Confidence had dropped to the lowest read in 16 years, in-line with housing stats, maybe they will reverse just as quickly once mortgages are available and the economy shows growth.

If we could only kick-start the Housing Market things might get start rolling, but until they do just watch for the Dollar to start prodding some Resistance areas as Trade Desks test out where the heavy Ticket Orders are sitting. Upside Dollar moves may come in the near-term as the natural reaction to an over-sold $ plays out- but take care because the intra-day reversals from those moves that do hit the areas of heavy Ticket Orders will send things packing backfrom where they just came.

9 months Housing Inventories will be a light at the end of the tunnel, and at that time we can maybe plot how the greenback is going to get back the last 9 months of stolen ground, and against which pairs first.

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