February 3rd Market Update – Housing analysis and the data I use; Stocks, gold and silver, oil, bonds, bitcoin; Chart and market action and my predictions

I have uploaded a February 3rd market update. Click here to go to the show archives page to listen or you can listen on the link below.

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-Housing analysis; Are we beginning to see a shift toward some sort of longer-term equilibrium? Time will tell as we are still in a deficit, but things may eventually change. New Homes sales are slowly rising and the average and median prices have fallen. Residential construction rose, after a drop in September and October.
-December’s data has been delayed, because of the government “shutdown, but home builders may be adjusting. Build more units and use cheaper-grade materials. They need to adjust to higher mortgage rates.

As mortgage rates rose the home builders have responded with more cheaply made housing.  With rates dropping will this trend change?
Home builders have begun to shift to lower cost housing. Will this affect new home sales in the future?
I look at housing starts, but this includes apartment units. I prefer single-family housing as that shows the truer sense of what the market desires.
(New home sales in thousands) Let’s hope October was an anomaly. Rental properties still have good support as these numbers still need to rise further. For existing rental property owners, the worse the numbers, the better your prospects.

-I am concerned that traders may begin to speculate on how genuine the Fed is with its dovish stance. The latest Fed balance sheet data indicate a further asset unwind.

-I am turning neutral on gold this week; We have been bullish on gold since mid-August at 1190-1200. The COT report from way back in late December indicates a large shift in sentiment. The Commercials added tons of shorts at a much lower price and while the numbers back then were still reasonable, I am sure the trend intensified over the next five weeks. We are up $130 since our bull call.
-I am neutral on oil and the 10-year UST. Though the COT report is more bullish for oil, I have to think that after a test of the 100 day mva (59.25 currently, but dropping fast) we will rest. Moreover, we need to see the XOP pop above 31 resistance to 33-34, before I am convinced higher prices will prevail.
-The gold and 10-year COT reports show how well a trader can do when he or she trades against the large specs when they are overly stretched.
-Still bearish on BTC; One descending triangle after another. Is the latest floor in the low 3,000’s about to break? There have been several descending triangles over the past year; all within one huge year-long descending triangle. There is a lot of blood in the crypto realm and many of the gurus are now broke and need to liquidate. Lethal overconfidence on display as things wipe out.