Housing Index Cracks

I am expecting a short-term low and market bounce soon. The time to be putting up bearish charts was before the hard drop, as with our reviews of the Semiconductor sector (the most recent of which was here). So that said, here is another interesting and bearish chart; the Housing index (weekly chart).

This is an old NFTRH chart dating back to early 2014. Back then we were managing a bullish Cup & Handle (the measurement of the Cup was 250+, and was hit in July). Recently I pulled it out of mothballs to note key support, which was as yet still intact. This week that support, at the rim of the Cup, is getting taken out.

I suppose economists who want to cheer the great Payrolls number (see this morning’s post on the subject; it’s more than just payrolls related, with more views on manufacturing and Semis) will interpret that tanking US markets are a great opportunity. They are probably fluffing the media about how this market correction is China’s fault and the US continues to be a bastion of economic strength. Okay then, go ahead and buy the Homies (you might even get a bounce to 225 out of it). All those consumers bolstered by all those ‘back end’ services jobs are lookin’ to move on up, right?

This index is broken as is the US stock market, now joining global markets. Any bounce will be an opportunity to sell or reestablish short positions as the case may be. 2016 is not necessarily lost, but the intermediate trend, baring the most miraculous rally I’ve ever seen this afternoon, is.