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September 22, 2006 at 6:25 AM in reply to: Could a Fed Funds Rate of 3% Revive the Housing Market #36046
Trader Chris J
ParticipantChris Johnston
iamafuturestrader.comMy research on home price movement does not show a real tight relationship to interest rates. When I first started studying this I was trying to use my knowledge of the bond market as an edge in forecasting housing. I was very surprised to find out that the relationship was not consistent.
My guess as to why this is true relates to market psychology. Maybe once the good ol momentum ball gets rolling one way, a clear fundamental like this gets basically ignored. I think we are in a down cycle and rates will have virtually no effect on it. Affordability still at some point has to matter.
Besides, I love being called a “bitter renter” by someone with 1/20th of my asset base. Keep it coming LOL! These types of people never have the big asset cycles right, it is a rule of nature.
Is anyone in this blog with the real name Ben Santos? If so please send me an email, the email address I got for you was invalid and as a result I could not reply.
ParticipantChris Johnston
iamafuturestrader.comI am constantly blocked from being able to log in but I magically got through this am so I wanted to just make a brief comment about oil.
Many of you have posted some very good commentary on possible reasons for the Oil price drop. If you go to my blog and read my Aug 16th entry, I explained why fundamentally in trading terms this market was looking bearish, the price was at 73.19 at the time which you will see.
I do not make investment decisions based on larger scale global economic judgements. The reason is that I have no idea at any given point in time which of any of the arguments put forth in here might be the actual reason behind the price movement. It is just impossible to quantify these types of things tight enough to frame a decision around.
More importantly, larger scale economic influences might very well influence the asset class but timing is very important, you can be right and get wiped out financially with bad timing. This big rally in bonds that I began telling people about in July has really accelerated to the upside. The most likely cause of this is economic weakness coming. However, that does not matter at all. The trend is up so most of my entries but not all will be longs. This is in spite of a heavy commercial short position at the moment. The trend is your friend etc..I will still countertrend trade the really extended moves for reversions to the mean. ( anx go read a book or two before making another embarassing comment about this )
Oil is in a downtrend, so just short the rallies at this point. Whether or not there is some broader economic reason for $100 Oil eventually, who knows. The bottom line for me is the trend is down. One of the old trading adages about sharp moves like this is always take the first retracement entry ( which means short the first bounce against the downtrend ).
Everyone have a great weekend
September 11, 2006 at 7:44 AM in reply to: Quick Poll: Year of trough & decline from peak to trough #34946ParticipantChris Johnston
iamafuturestrader.com30% for OC, I think a tad more for San Diego. This is basis the median, some individual properties will drop more. 2008 is where I will start looking for evidence of the cycle low. The crash that is happening in the CRB (Commodity Research Bureau Index of all commodities) right now is going to help keep inflation under reasonable control for the moment.
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