US markets are not making much progress for the past two days. Or is it the resting period before any major move? or is it waiting for any major economic indicator to support move in either direction?

Former Federal Reserve Chairman Alan Greenspan said the drop in U.S. home prices will probably end “well before” early next year as the number of houses on the market diminishes, aiding an economic rebound. “It will not be until early 2009 that we will get close to having eliminated most of this home inventory, Greenspan told a conference in Tokyo today sponsored by Deutsche Bank AG and co-hosted by Bloomberg LP. “But it is very likely that home prices will stabilize well before that.” I am not sure how much you can rely on the words from someone who is often referred to one who created this bubble.

Along the same lines, here are few words from PIMCO chief, from Bill Gross’s Apr Market outlook:

  1. Home price declines have to be halted in order to revive the U.S. economy,
  2. The Bear Stearns crisis and its solution will lead to increased government regulation and a higher probability of inflation
  3. J.P. Morgan (the old man) was right – character, not assets, should form the foundation for lending, although a reversion to this old-fashioned model is not likely anytime soon, and
  4. Whether you know it or not – whether you like it or not – you are bailing out Wall Street.

xhb-april-09-2008.png Whatever it is, I think XHB (Home Builders SPDR) may provide some indication on how home industry is going to perform. We saw a jump from low of nearly $15 to current $23. Right now it almost resting at 200DMA as well 61.8% fib retracement. Is it saying that we have bottomed already? I think too early to say I am bullish, but in order to be more bearish it needs to fall below $15.

visa-potential-breakout.png VISA (V) is slowly making progress towards its IPO opening day high i.e. $69. It crossed previous high of $67.5 and is at an all time high close. VISA announced earnings date, Apr 28, 2008 and I am sure executives (who got Visa shares at $44) don’t want to disappoint the Wall street if they want to cash in from the VISA shares. is this the reason that is driving strength in the stock price? Also check the recent pattern, High on High volumes, low on low volumes. I am bullish and am playing bullish strategies on the stock but at the same time protecting against a modest fall.

Profitable trading, OP

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