THURS. JUN. 24- Real Estate And Day Trading

Yesterday, the data for existing homes disappointed the markets in coming in below expectations. The market dipped a little at the time. But when one looks at the data, it has to be one of the grimmest statistics in modern history- no exaggeration. It is not terribly surprising that sales plunged almost 35% from April to May with the expiration of the new homeowner’s tax credit as of April 30. But what is downright stunning to me is that the annual pace of homes sold is about 300,000- this would be the lowest annual total since detailed records began being kept in 1963. Almost as notable is that the median price of existing homes declined almost 10% on an annual basis to the lowest point since the end of 2003. With total sales expected to drop about 20% to a 410,000 annualized pace, expectations must be dampened further which already will put more pressure on a still largely government supported housing market. So of course shares of many homebuilders promptly rallied yesterday. In a tale of looking at the tiny detail within the story, the supply of new houses on the market dropped to its lowest point since May 1970. Thus, in the midst of what has been a poor year for housing stocks, most of them bounced a bit on the thinking that further affordability will spark demand for new homes even over existing homes with what will eventually be a very tight market. While a stock like KBH immediately plunged on the headline, it turned out to be a pretty good ‘buy thru unchanged’ type of day trade once it got positive on the day once again. The housing data as was shown both Tuesday and yesterday can and indeed is moving markets and stocks so it is but one more factor to constantly monitor as we progress through the summer.

Markets overnight were mixed in Asia with Tokyo flat but Hong Kong down 0.6%. The trend was a little worse in Europe with Frankfurt down 0.6% and London 0.7%. The dollar is flat against the euro, but weaker against the yen. Oil is down almost 1%. One of the more notable features of the morning is that the 10-yar bond continues its steady ascent with yields closing in on 3%. Amid this push to safety, futures are broadly lower but off their floor amid optimism about AAPL from a number of upgrades as well as positive durable goods data. Look for a continuation of yesterday- choppy and directionless- very difficult environment. Focus on the stocks in the news with earnings and product intros (NKE, AAPL, et al) as well as the small caps out with good stories (such as LTBR and SNMX).

Reiterating-

If the whole story is not there -

If something is good, assume either a short thru unchanged or an A-B-A2 (preferably to the downside in a downside market and the upside in an upside market) based on direction of the market unless specified.

If something is bad, assume either a buy thru unchanged or an A-B-A2 (preferably to the downside in a downside market and the upside in an upside market) based on direction of the market unless specified-


Good- The following stocks have good news and/or a strong technical pattern

MIPI- positive Azedra phase 2a trial data in Neuroblastoma tumors

LTBR- closed on a high after the company said it made a major technological breakthrough which it hopes will transform the nuclear power industry

SNMX- announced collaboration with Pepsi (PEP) to develop and commercialize new sweet flavor ingredients

DFS- decent earnings

Bad-The following stocks have bad news and/or a weak technical pattern

NKE- poor earnings

BBBY- terrible earnings

PAYX- poor earnings

ORIT- closed near a low after a sell imbalance yesterday

APOL- had a $277.5 million jury loss reinstated

WL- closed near a low after a brokerage downgrade

DCTH- closed near a low

LEN- poor earnings




Earnings:

THURS JUN 24 BEFORE

CAG DFS LEN

MKC


THURS JUN 24 AFTER

A.CN FINL HRB

ORCL RIMM TIBX


Good luck today.


Epiphany Trading, LLC


www.epiphanytrading.com


Erik R. Kolodny- Chief Markets Strategist
Brendan P. Byrne- President
Joseph R. McCandless- Managing Partner
D. Timothy Seaquist- Managing Partner