Stocks opened around unchanged and quickly turned positive. However, the advance was short in duration and stocks fell back into the unchanged territory. A late day advance pulled stocks back up to the prior session highs but failed to make new highs. Some of the gains were pared back and after a low range session stocks closed marginally higher.
The Dow closed + 19 points (+ 0.22%) and the broader based S&P closed up 1.87 points or 0.20 %.
On the economic front not much happened today. The only report released today was the Pending Home Sales Index as calculated by the National Association of Realtors.
To the surprise of the economist who had only anticipated an increase of 0.2 % the actual number came in + 6.7 %.
The magnitude of the difference between the actual number and the estimate is perhaps the best sign yet that the housing market might truly starting to turn the corner. The size of the US housing market makes it tough to really get a good handle on when the market will turn (think of it as a super tanker having to change course) but clearly, something seems to be happening.
If this trend continues we might even see some inventory reduction over the next two months...and this will most certainly provide evidence that the worst of the price declines are over.
However, should inventories not move in a meaningful way the supply will continue to erode prices and depress most real estate markets.
Today's price action in stocks was consistent with the required pause after the yesterdays advance. Trends are up and bearing a huge surprise not much should be able to derail the current uptrend.
I remain positive stocks (remember...I changed mind) and would expect stocks to continue to trend higher over time. We might pause for a little but overall stocks seem to be locked into an upward trend.
See you tomorrow
Steve Benger
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