Lows are now Lower than Prior Lows

Home-price declines will eat into retirement nest eggs. Wealth to drop at least 25% for homeowners in the 45- to 54-year-old age bracket in 2009. The FEDS hits a bit of reality, that perhaps interest rates should rise, perhaps we have been in recession, and perhaps inflation is here. But interest rates did hold, and the market first responded with typical euphoria.


" WASHINGTON (MarketWatch) -- Home prices across 20 major U.S. cities have dropped a record 15.3% in the past year and are now back to where they were in the summer of 2004, according to the Case-Shiller home price index released Tuesday by Standard & Poor's.

Prices in the 20 cities are now down 17.8% from the peak two years ago.
Prices were lower in April than they were a year earlier in all 20 of the major metropolitan areas as tracked by the Case-Shiller index."
It frightens me to even think many of us don't understand this. We have created this problem, and ARE the reason behind the collapses.

With this said, all is not as it appears. The market moved up well to a theoretical Dow top of 11,964 yesterday, allowing traders as much as 5.00 per contract profits on the July600C. Whipsaw traders were also able to profit 1.00 to 2.00 per contract on the reversing July580P.

Whipsaw often occurs around the FOMC. If the market can find any footing today, we continue to see a whipsaw upside. As the market closed historically at 11,800 earlier this year bulls will remember a 400 point plus upswing move. We believe that this could occur again.

The good news is that lows are now lower than prior lows. The market narrowly missed a move above 12,000. Puts may have another run, but the bulls are trying, and will soon trick the market.