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Shahla Money Managing Guru

Joined: 13 Nov 2004 Posts: 3324
Cash Points ££ 126163.28
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Posted: Fri Mar 30, 2007 4:07 pm Post subject: The US Housing Market 4 Year Cycle – More Falls Expected |
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It seems that of late that a major topic being covered by the mainstream media is “sub-prime” mortgages and the related scare of the downstream impact. Well, the charts warned of problems in the home building sector a year and a half ago. In fact, I first reported in October 2005 that the charts were showing signs of trouble for the housing market. In the February 2006 I also reported on the further technical problems and developments for the housing sector.
Then, in the May 19, 2006 I followed up again on the housing sector and reported that the evidence from the intermediate-term charts had continued to evolved to the point that the longer-term trend had topped. I went on to give very specific cyclical high and low points to watch for as continued confirmation of my thesis. My point here being, the charts were right and the mainstream media once again failed to warn and even refused to acknowledge a housing bubble. That is until now when the problem becomes obvious.
Now, I once again want to follow up on the housing sector and take a look at what the charts are currently saying. The first chart below is a weekly chart of the Dow Jones Home Construction Index. I have marked each of the intermediate-term cycle lows since March 2003 with a blue “I” that is outlined in red. The 2004 intermediate-term cycle low came in May, the 2005 intermediate-term cycle low came in April and the 2006 low occurred in July.
I have also included my intermediate-term Cycle Turn Indicator in blue and my Trend Indicator is in green and red. When the green is above the red, it is confirming an intermediate-term up trend and when the red is above the green it is confirming an intermediate-term down trend. When the Cycle Turn Indicator is moving in the same direction as the Trend Indicator, it is telling us that we have trend uniformity. When the Cycle Turn Indicator is moving in the opposite direction of the Trend Indicator it is telling us that we have a corrective move underway. That being said, let's now see what the charts are presently saying.
http://www.marketoracle.co.uk/Article634.html |
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