The housing market may already be self-correcting, and we should be wary of any over-correction.
Perhaps, but over-correction is often the outcome in Washington.
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Analysts like Yulong Li, research director at Balentine in Atlanta, have been saying that a 20% to 30% year-over-year correction in Chinese real estate along coastal cities like Beijing and Shanghai would not be unheard of.
Though my sources all expect a soft landing of the Chinese economy and a well-managed correction of the over-heated housing market in the tier 1 cities.
Given that the Dax topped out 12 days ahead of SPY, we may see more choppy-to-downward action before its correction is over.
Both need to move above the prior three-week highs to indicate that their correction is over.
The short-term technical outlook and increasing volume suggests the correction is over but are there any new opportunities for investors or traders?
Even the largest and strongest stock market of Europe, Germany, which had been making new highs right along with the Dow, has been in a correction over the last few weeks, now down 7%, with short-term support levels broken and looking like more downside ahead.
The OBV broke its short-term downtrend in early November, line c, suggesting that the correction was over.
Because exactly a year ago today, in the midst of the excitement over earnings reports, the market was just three trading days from topping out into the scary April-July correction of last year.
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Rather than being seen as a sign of desperation, this should be viewed instead as a mid-course correction to offset the impact of the restrictive monetary policy that the country has implemented over the past two years.
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