Economists at Fannie Mae have issued a revised forecast for the US economy and it is lower than previously expected. Seems to be a trend lately of revised forecasts to the downside.

Fannie Mae Economics and Growth Mortgage Market Analysis Group: Expectations Shifting Down

• Concerns about the global economic recovery, including lingering worries regarding European sovereign debt, and increasing caution at home among private employers and consumers are evidence of the tenuous nature of the current economic recovery

• Revised its projected growth for 2010 to 2.8 percent from 3.2 percent, and remains on guard for a setback amidst increased uncertainty and downside risks.

• The group now expects housing sales in 2010 to be basically flat, though it expects a modest recovery for housing in the fourth quarter and into next year — due in large part to the support that historically low mortgage rates are providing.

Fannie Mae Lowers Expectations Of The US Economy is a post from: Rebel Traders - Stock Market and Economic Analysis

The FOMC has lowered the GDP expectations for the current year as well as 2011.

• 2010 GDP 3.0-3.5% (3.2-3.7% prior)

• 2011 GDP 3.5-4.2% (3.4-4.5% prior)

• 2012 GDP 3.5-4.5% (3.5-4.5% prior)

With regard to the employment situation the FOMC has revised the unemployment rate forecast for the next three years. Not good news for those who were expecting a quick rebound.

Unemployment Rate:

• 2010 9.2-9.5% (9.1-9.5% prior)

• 2011 8.3-8.7% (8.1-8.5% prior)

• 2012 7.1-7.5% (6.6-7.5% prior)

Inflation expectations have also been reduced

PCE inflation:

• 2010 1.0-1.1% (1.2-1.5% prior)

• 2011 1.1-1.6% (1.1-1.9% prior)

• 2012 1.0-1.7% (1.2-2.0% prior)

- Core PCE:

• 2010 0.8-1.0% (0.9-1.2% prior)

• 2011 0.9-1.3% (1.0-1.5% prior)

• 2012 1.0-1.5% (1.2-1.6% prior)

The FOMC statement also mentions that additional stimulus spending may be required if the economic outlook continues to worsen.

FOMC Lowers Growth Outlook – Jobs Market Forecast Deteriorates is a post from: Rebel Traders - Stock Market and Economic Analysis

I look forward to receiving updates from Rick Davis at the Consumer Metrics Institute. Once again Rick has allowed me to publish his latest update here for you.

On June 25th the BEA quietly revised its measurement of GDP growth for the first quarter of 2010 down for the second time, this time to 2.7%. The newly revised growth estimate nearly matches the Consumer Metrics Institute’s original projection for the first quarter, which was 2.62%. The big difference is that the Consumer Metrics Institute’s projection (based on our Daily Growth Index) was available on November 30, 2009 — seven months ago.

Because the Consumer Metrics Institute’s Daily Growth Index only lags the real-time consumer economy by several days and has a day-by-day time resolution, the Daily Growth Index can also tell us something totally missing in the BEA report: that the newly revised GDP ‘freeze frame’ picture captures a moment in time when consumer demand was dropping at a rate of about .08% per day. This means that the difference between the revised GDP and our original projection represents only a single day of economic change. But more importantly, our Daily Growth Index shows the dynamics of the economy at the point in time when the BEA ‘still picture’ was taken.

One other important note should be made about the June 25th BEA release: in it the BEA also increased the inventory component within the 2.7% number from 1.65% to 1.88%. That means that the net-after-inventory-adjustments number was less than 0.9%, and over two-thirds of the reported aggregate growth was from relatively unpredictable inventory swings.

If factories were unwittingly growing inventories during the first quarter in the face of what was really slackening consumer demand, the official GDP numbers for both the second quarter and the third quarter (to be released 4 days before the U.S. mid-term elections) could be interesting, since factories could very well over-correct again — but in the opposite direction.

Because Friday’s BEA release mirrors our Daily Growth Index from November 30th, the index’s subsequent course provides some insight into where the economy has been heading since then. Roughly half a quarter later (on January 15th, 2010) the index fell into net year-over-year contraction.

During the nearly two quarters since then the index has been showing mild but continued contraction. When that contraction is charted along with similar contraction ‘events’ from 2006 and 2008 it can be seen that 2010 is shaping up as wholly unique:

As the chart shows, the current contraction has progressed for nearly two quarters without yet tracing a clearly formed bottom. And any measure of the severity of an economic slowdown must include not only maximum rate of contraction, but duration as well. Although the 2010 event has been milder than 2008 in terms of absolute negative growth rates observed, if it progresses long enough the aggregate economic pain could be substantial. For a little perspective, the total economic impact of 2010′s contraction is already nearly twice what was experienced in 2006, when the GDP slipped to a barely positive +0.1% growth rate. And (to date) the total economic impact of the 2010 event represents nearly a full third of the pain experienced during the ‘Great Recession’ of 2008-2009.

The key message to take from these numbers is that the fundamental change in consumer behavior which we have been observing over the past three quarters is likely to be protracted. Although this change in behavior is most clearly shown in our data by consumer reluctance to take on new or increased debt, it probably reflects de-leveraging much more than balance sheets — almost certainly including de-leveraged consumer expectations for the near future.

At the Consumer Metrics Institute we measure day-by-day changes in the discretionary durable goods transactions of internet shopping consumers. We genuinely believe that the real economy lives where ‘Main Street’ consumers are (figuratively and/or literally) clicking ‘Add to Shopping Cart’, not where the BEA’s factories slavishly follow the consumer’s lead. The millions of consumers we measure respond collectively to what they see going on with their own local economy, family and friends. And right now real-world ‘Main Street’ consumers are demonstrating significant caution.

Rick Davis

Consumer Metrics Institute

GDP Revisions and Consumer Behavior – Guest Post is a post from: Rebel Traders - Stock Market and Economic Analysis

(all times are US ET)

08:30 US Preliminary Q1 GDP, Q1 GDP Price Index, Q1 Personal Consumption, Q1 Core PCE, Initial Jobless Claims, Continuing Claims

10:30 US Natural Gas Inventories

13:00 US Treasury $31B 7-year note auction

Earnings

Before the Open: COST, CMCO, CONN, GCO, HGG, HNZ, MNRO, TIF

After the Close: BCSI, DMND, ESL, NOVL, OVTI, SEAC, TMRK

Economic Data and Earnings Schedule for May 27, 2010 is a post from: Rebel Traders - Stock Market and Economic Analysis

Several days ago I received an email from Rick Davis from the Consumer Metrics Institute. In his email Rick provided a very interesting analysis regarding consumer spending and the economy.

As I read through the data that Rick presented to me I was impressed with the methodology utilized and how he arrives at some unique forward looking indicators. I started an exchange with Rick and asked if he would be interested in putting together a collection of his findings for my readers. I was happy that Rick accepted the invitation as I believe his research is unique and shines a new light on the claims of a strong economic recovery.

What was the Economy Really Doing … Yesterday?

By Rick Davis, Consumer Metrics Institute

Recent reports of a strengthening recovery are not fully supported by the behavior of consumers on the web. At the Consumer Metrics Institute we measure the depth and quality of web based consumer "demand" on a daily basis, and during this recovery the year-over-year changes in "demand" that we measure actually peaked in August 2009 and have been declining ever since.

In fact, our "trailing quarter" of web based consumer demand slipped into year-over-year contraction on January 15th, and since then we have been plotting the progress of this 2010 contraction event against the profiles of similar events in 2006 and 2008:

(click images for full size)

As you can see from the above chart the 2010 consumer "demand" contraction event is unique: if there is a "second dip" it may very well be unlike anything we have seen recently. Instead of a "call-911" type of event in 2008 or the "hiccup" witnessed in 2006, we may be seeing a "walking pneumonia" type of contraction that has legs.

In contrast to our measurements, on April 30th the Bureau of Economic Analysis (“BEA”) of the U. S. Department of Commerce published their latest reading of the state of the production (or “supply”) side of the U. S. economy. The BEA’s measurements of the economy are substantially “downstream” from the consumer activities that we measure. It simply takes many weeks for changes in consumer behavior to become reflected in production schedule changes at the factories.

Their measurement showed that first quarter 2010 factory activities were growing at a 3.2% annualized rate, equivalent to where our consumer “demand” side “Daily Growth Index” was on November 24th, 2009, roughly 18 weeks earlier. This means that our “Daily Growth Index” of consumer “demand” side activity is now leading the production oriented GDP by 18 weeks:

Compared to the 4th quarter of 2009, the annualized growth rate of the BEA’s official GDP has dropped by 43%. Depending on your point of view this could be interpreted either as a glass that is “half full” or a glass that is “half empty”:

1). The “half full” reading would mean that the GDP numbers confirm that the recovery has at least moderated to a historically normal growth rate. The good news is that this means that “the economy is still growing,” albeit at a historically normal rate. The bad news is that a normal growth rate would only warrant historically normal P/E ratios in the equity markets.

2). The “half empty” reading would mean that the near halving of the GDP’s growth rate confirms that (at the factory level) the economy has finally begun to “roll over” towards a “second dip”. If so, the BEA’s announcement portends even lower readings in the quarters to follow.

At the Consumer Metrics Institute, our measurements of the web-based consumer “demand” side economy support the “half empty” reading of the new GDP data.

A look at our “Daily Growth Index” also shows that towards the end of November 2009 the “demand” side economic activity was dropping so quickly that a two week change in the sampling period would make a huge difference in the numbers being reported. For the calendar quarter the annualized growth rate is the 3.2% reported by the BEA. If the sampling period had shifted to two weeks earlier, the reported GDP number would have been 4.4%, substantially higher. However, if the sampling period had shifted to two weeks later, the GDP growth rate would have been only 2.0%, less than half the reading from only 4 weeks earlier. This is the sign of an economy in rapid transition.

The methodologies used by the BEA when measuring factory production are ill suited to capturing an economy in such rapid transition. In the 4th quarter of 2009 the production side of the economy was topping, causing some consistency in the BEA’s consecutive estimates (5.7%, 5.9% and 5.6% respectively) of the quarter’s annualized growth rate. The first quarter’s production environment was at a much more dynamic spot in this particular economic cycle, and the subsequent monthly revisions by the BEA may be significant.

From our perspective the GDP is only confirming where our numbers were in November, which is (relatively speaking) ancient history. Since then we have seen our “demand” side numbers slip into contraction (on January 15th), and they have recently lingered in the -1.5% “growth” range.

We have long since recorded the “demand” side activity that has been flowing downstream to the factories during the second quarter of 2010. If the GDP continues to lag our “Daily Growth Index” by 18 weeks we should see the 2nd quarter 2010 GDP contracting at a 1.5% clip.

I say “should” because we have observed before that factories are loath to actually contract production until rising inventory levels force them to curtail normal production schedules and furlough staff. We saw this happen during the 2006 “demand” side contraction event, when the GDP production side growth effectively dropped to zero but never went negative. The 2010 contraction however is showing enough persistence that inventories are likely to eventually build to the point where production curtailments must be made.

In summary, our data is telling us that U. S. consumers are very reluctant to take on the kind of debt that they have traditionally assumed when pulling the economy out of previous recessions. Even a recent upturn in our retail index faded once the seasonal impact of the forward shifted Easter holiday had passed. Furthermore, even during the Easter retail up-tick the quality of the transactions was not very high. Big ticket items requiring longer term financial commitments were relatively scarce, and for that reason our Weighted Composite and Daily Growth Indexes did not materially respond.

Our mission at the Consumer Metrics Institute is to measure (on a daily basis) exactly how consumers are leading the U. S. economy. We "mine" nation-wide internet consumer tracking databases on a daily basis for early warnings about the demand side of the economy. Our data is significantly upstream economically from the factories and the products measured by the GDP, putting us far ahead of the traditional economic reports. Perhaps our data is too timely; we are so far ahead of conventional economic measures that our story generally differs (either positively or negatively) from the stories being simultaneously reported by more traditional sources.

Several points about the Consumer Metrics Institute:

1). We are not economists, formally trained or otherwise. We are simply geeks who are analyzing real-time U.S. consumer tracking data in search of macro-economic trends. On-line marketers use the same data to serve up focused ads or to offer customized product suggestions. Why governmental agencies have not realized that the same data is a gold mine of current consumer economic macro tendencies amazes us.

2). This is a revolutionary new daily source of spin-free hard data about the demand side of the economy. It is purely objective data collected daily from millions of on-line transactions by U.S. consumers. It does not involve any governmental sources. It does not utilize ‘seasonal adjustments’ (all numbers are year-over-year). It is simply based on real-time U.S. consumer transactions (please see http://www.consumerindexes.com/Overview.pdf for more information).

3). I’m a physicist, so I understand numbers and the importance of monitoring physical systems in real-time — especially if you care about how the physical system is evolving and have some interest in keeping it from crashing. Measuring what was happening last quarter makes no sense (except, perhaps, for academic papers and governmental archives).

4). We’re not professional doom-sayers. In fact, we were wildly optimistic this time last year. We simply report the numbers — which at the moment just happen to be much less auspicious than the mainstream media has been reporting.

The Indexes themselves can be found at http://www.consumerindexes.com/index.html

Thank you,

Rick Davis

Consumer Metrics Institute

—–

I want to thank Rick for putting together this collection of his recent research. You can find more of Rick’s research at Consumer Metrics Institute

What was the Economy Really Doing … Yesterday? is a post from: Rebel Traders - Stock Market and Economic Analysis

A very good write-up can be found over at Financial Armageddon tonight regarding the health of the consumer.

Using data sampling techniques that is far ahead of the lagging government data some very intriguing data can be mined.

Check out the full article at “Sliding Down The Slope”

Consumer Metrics – Another Way To Forecast GDP is a post from: Rebel Traders - Stock Market and Economic Analysis

What a week we have been through. The situation with Greece seems to change by the hour with battles between the European Union, the IMF, and Chancellor Merkel of Germany. Greece is rumored to try and go to the market this coming week with a bond sale.

Greece will issue Eurobonds next week in order to test the rescue plan – Greece plans to borrow about €5B before end of March – Source: news wire

Q4 GDP

The final Q4 GDP came in and it was a bit lower than expected (5.6) with the downward revision mostly coming from lower consumer spending growth (1.6% vs 2.8% prior) as well as more weakness in the real estate markets.

A significant reason why the Q4 GDP was a high as it is, even after the downward revision, is the buildup of inventories. As stockpiles of goods were allowed to dwindle in 2009 to save cash this has led to a surge of inventory buildup as companies begin to add goods to their inventories for the expected return of consumers in droves. When purchasing agents all hit the manufacturers at once to build up some stockpiles it creates a surge in virtually all manufacturing sectors. This is what created a GDP to go from below zero to a suddenly positive number of 5.6%.

The reason, which I have opined previously, that the GDP witnessed in Q4 will not be repeatable is simple, the surge of inventory buildup is a one off event. At best, manufacturing will curtail again as the inventory buildup is completed. Now comes the consumers, if the inventory buildup exceeds the consumer demand then purchasing agents will once again be scaling down future orders. If consumers have reached a new “comfort level” of buying frugally, then it’s very clear that inventory stockpiles will only be maintained at a status quo level, not growing stockpiles which would mean a stagnant manufacturing sector.

With everything hanging on the consumer it becomes clear to me that irrespective of any pent up demand for goods, the longer term outlook remains weak. With unemployment still hanging near 10% (closer to 17% when counting those who are forced to work part time for lack of full time work), a housing market that is still in shambles, and foreclosures still rising which I don’t expect to see any major turn in the numbers until late 2011 or early 2012 at best, and consumer credit still in a contraction trend then how is it the consumers will be bouncing back to pre 2007 levels?

Housing Market – Government keeps blowing air into the balloon

Instead of letting the natural supply and demand system establishing market prices, the government keeps trying to blow air into the already deflating balloon. We learned just yesterday that the Obama administration is attempting to get banks to write down more mortgages to aid those who are underwater. Additionally, the administration is also considering payment assistance to those who are unemployed.

While all of this may be good in the short term for those who are underwater with their mortgages or unemployed, it continues to stall the natural process of price discovery in the markets. The governments attempts to salvage the housing market is keeping prices at artificial levels. In other words, the government is doing everything possible to keep the housing bubble from deflating any further – at taxpayer expense. And creating a false hope that prices will skyrocket upwards in the coming months and years.

The only way to correct the housing market problem for the long term is to allow the excess debt to be taken out of the equation. I understand this will be a painful process, but it is necessary to “reset” the entire market. All government efforts to keep the balloon from deflating any further only prolongs the pain. Those who believe the housing bubble of the past decade will return will be disappointed, and this will lead to further stresses in the housing market as speculation is once again rolling the dice that the bubble will come back.

Jobs

The weekly jobless claims data that was released on Thursday showed no let up in the number of people seeking unemployment insurance benefits. It is holding steady at approximately 450,000 each week. Next week the monthly unemployment report will be issued (on April 2nd). Expectations are that the report will show a positive job growth for the first time in nearly 2 years. But if it does show job growth, how much of it will be a direct result of the temporary hiring the government is doing now for the 2010 Census effort? Please consider my post on employment impact of the 2010 Census.

Health Care Reform

It passed, now we have to live with it. Already there are scattered reports of individual polices experiencing increasing premiums following the President’s signing the bill into law. Large and small companies have already reported that the changes to the health insurance laws will impact revenues for 2010 as they will be forced to spend more on health insurance for the employees. AT&T reported yesterday that it will cost upwards of $1 Billion in 2010 alone.

AT&T Corp Discloses forecasts $1B non cash charge in Q1 due to health care reform – filing

- Included among the major provisions of the law is a change in the tax treatment of the Medicare Part D subsidy. AT&T Inc. ("AT&T") intends to take a non-cash charge of approximately $1 billion in the first quarter of 2010 to reflect the impact of this change. As a result of this legislation, including the additional tax burden, AT&T will be evaluating prospective changes to the active and retiree health care benefits offered by the company.

Similar statements were issued by 3M, Caterpillar, and John Deere in the past two days. If large companies will be facing higher costs then it is likely to have an impact on employment levels and/or benefits for retirees. This could place even more stresses on the already broken Medicare system.

But it is not the large companies that I worry about, it is the small companies with at least 50 employees that will be facing a choice of providing health insurance at great costs or no insurance at all and simply pay the yearly penalty to the government, which for some companies will be cheaper than paying for health insurance.

While the debate on the merits and demerits of the new law continues, I see it as a disaster for the economy and the public at large. Because so much of the new law does not go into effect until months and years later it allows the health insurance companies to gouge their customers before they must adhere to the new regulations. Much like the credit card companies did over the past 8 months before that law went into effect.

The Market

The stock market remains jittery and on the edge. Following the health care reform bill becoming law two bond auctions were held, and both were bad. This sent yields higher as the bond market is having a hard time absorbing all of the notes being sold by the government and the increasing threat of the increasing deficit. Together these two factors gave the bond market a shock this week and should this continue we are likely to see interest rates rising significantly in the months to come.

But Ben Bernanke will either be forced to raise the Fed Funds rate or drain liquidity in order to control yields. Either situation would not be good for the equity market at this time.

The equity market continues to hover around resistance levels, remains extremely over bought, and sentiment indicators that show extremes are upon us. All of the ingredients for a significant turn in the markets.

Q4 GDP, Jobs, Health Care Reform, Housing, and the Stock Market is a post from: Rebel Traders - Stock Market and Economic Analysis

GDP comes in hot at a whopping 5.7% and the market was not impressed. And why should it be, a significant part of the GDP was nothing more than a huge inventory gain. It is my view that this GDP print is a ‘one hit wonder’. The stimulus money from the Government played a big role in goosing production which leads me to think of the old saying “hurry up and wait”, in this case a wait (and hope) that the gains in inventory are matched with future gains in sales which I still foresee as tepid for a considerable time to come.

Speaking of production, a report this afternoon off the wires is that General Motors is increasing production of large vehicles (SUV’s and trucks) and is reducing production of smaller fuel efficient cars. I guess General Motors has still not learned the lesson that drove them into bankruptcy in the first place.

A lot of bearish indications on the charts, which I will cover in detail in the weekend video. One particular chart that shows extensive damage is the Nasdaq.

More later…

GDP Comes in at 5.7% and the Market Is Not Impressed is a post from: Rebel Traders - Stock Market and Economic Analysis

Michael Pento takes a look inside the projections of a “V” shaped recovery, and turns it upside down.

The following article is re-printed for you here with permission from OilPrice.com

Originally published at: http://oilprice.com/article-the-tepee-shaped-recovery.html

The Tepee Shaped Recovery

By Michael Pento

The shape of this economic recovery will not be in a “V”, as many pundits have promulgated, but instead may be the inversion of that letter…which will unfortunately look much more like a tepee. The upcoming downfall will surprise most investors who have been tricked into believing that a government can print and spend their way into prosperity.

Undeniably, there has been a superficial recovery in the economy, which was presaged by a 65% rebound in the S&P 500 since March of 2009. Third quarter GDP was positive—albeit at a subpar and marginal 2.2%—and Q4 of 2009 and Q1 of 2010 should also show positive economic growth as well. But most of that growth will come from an inventory rebuild and not from a sustainable increase in output.

But let me explain why this recovery will severely underperform those of previous recessions.

First we must realize what has previously led the economy out of a recession. It has historically been consumer spending accompanied by a recovery in the housing market.  But we never had a nation-wide bubble in real estate before this previous period. After a bubble bursts, it takes decades before the asset in question can return to its former highs—and that’s without adjusting for inflation. For example, look at the gold market in 1980 and the NASDAQ market in the year 2000. The gold market didn’t return to its nominal high until 2007, some 27 years after its bubble burst. And the NASDAQ is still more than 50% below its former high of 10 years ago. Therefore, if the nature of bubbles also applies to the housing market, we cannot count on real estate to lead the economy out of a recession. Evidence of the continued weakness in housing was displayed by last week’s release of pending existing home sales, which dropped by 16%!

Many economists also believe that the consumer will spend us into a viable recovery. They are mistaken here as well. Household debt as a percentage of GDP was “just” 46% back in 1983—that was the last time the unemployment rate was 10%. Today household debt is 96% of GDP. That’s correct; consumers have more than twice the level of debt as they did during the last serious recession. Can they be counted on to pile on more debt at this juncture? I think not.

But perhaps the most trenchant difference between this era and those of previous recessions is the direction of interest rates. In the early 1980’s, the effective Federal Funds rate was close to 15%  and declined to below 6% by the middle of that same decade, thanks to a precipitous drop in inflation. One cannot underestimate the huge tax cut that was given to investors and the boon transferred to businesses and consumers by having the cost of money plummet in such a short period of time. I would argue that the cost of money and the rate of inflation could and should increase significantly over the next few quarters. But even if I’m wrong, no one can contend that interest rates will provide a tailwind for the economy in 2010 as it did during the early 80’s—the last time unemployment was above 10%.

Finally, in order to believe the economy is on the brink of a lasting recovery we need to see that banks are lending money to the private sector in order to purchase capital goods that are used to create wealth. However, we see the opposite occurring today. Total Loans and Leases at commercial banks have decreased 7.7% from December 2009. The only money banks are lending is to the government. Without capital being extended to small businesses they cannot expand production or hire new employees.

The sad truth is that the real estate market will be in a malaise for years to come. The consumer will not be able to take on and service a substantially increased amount of debt. There will be no relief from falling interest rates or lower inflation and the cost of money may indeed rise despite the Fed’s manipulations. And banks are frozen from lending precisely because the demand from money is down while the compulsion on the part of financial institutions to preserve their capital is overwhelming.

Knowing the truth will enable you to understand that the Fed will not be able to raise rates significantly in 2010. That means that the dollar stands unprotected and will resume its secular decline. Commodities will do well along with foreign stocks. Unfortunately, the rising price of oil and other commodities will put pressure on an already overburdened consumer, who already suffers from stagnant wage and labor growth.

The sooner we face these realities the sooner we can start to deal with them in a legitimate fashion. We can start by defending the value of our currency. Thereby ensuring that the upcoming double-dip recession is not also accompanied by yet more inflation.

Article written by Michael Pento, Senior Market Strategist at Delta Global Advisors for OilPrice.com who focus on Fossil Fuels, Alternative Energy, Metals, Oil Prices and Geopolitics. To find out more visit their website at: http://www.oilprice.com

Recovery – A Tepee Shape, Not V Shape is a post from: Rebel Traders - Stock Market and Economic Analysis

This morning the Q3 GDP was revised lower to 2.8% (from 3.5%) and personal consumption was also revised lower to 2.9% (from 3.2%).

The mortgage industry is still falling apart from within. Consider this news out of Freddie Mac (FRE) this morning:

Freddie Mac Reports Oct monthly metrics; Single Family delinquency rate 3.54% v 3.33% m/m

Until there is a significant improvement in delinquencies this data still suggests much steeper losses lay ahead of us in the financial sector.

S&P Case Shiller Price Index came in ‘not so hot’:

SEPT S&P/CASESHILLER-20 Y/Y: -9.36% V -9.10%E;   HOME PRICE INDEX: 146.5 V 146.9E

It had been showing the slightest sign of stabilization in recent reports, now it is headed back down again.

During the overnight hours we got confirmation of the channel on the S&P E-mini’s with the /ES trading down to 1098, right at the channel support line.

Watch this channel carefully, a move below the channel is the dynamic change needed to set this market into a new downward path. The range of the channel is 1100 on the bottom and 1120 on the high side.

S&P Futures

S&P 500 Chart and GDP is a post from: Rebel Traders - Stock Market and Economic Analysis