Pricing Better but Will it Hold

Interest rates have improved slightly today as the market posts gains early this morning. The question is will these gains hold. It seems investors are taking cue from the short term markets right now which are currently showing support at well established support levels... namely 10,000 for the DOW, currently trading around 10,350... and 1,100 for the S&P, which is now trading around 1,110. It will be difficult for us to break through our recent resistance levels without these support levels being broken.

There are signs that our economy is not as strong as many would like us to believe. Point in fact numbers released to day on Reuters demonstrate this point quite clearly.

08:30 16Jun10 RTRS-US MAY HOUSING STARTS -10.0 PCT VS APRIL +3.9 PCT (PREV +5.8 PCT)
08:30 16Jun10 RTRS-US MAY HOUSING STARTS 593,000 UNIT RATE (CONSENSUS 650,000) VS APRIL 659,000 (PREV 672,000)
08:30 16Jun10 RTRS-US MAY HOUSING PERMITS -5.9 PCT VS APRIL -10.9 PCT (PREV -10.9 PCT)
08:30 16Jun10 RTRS-US MAY PERMITS 574,000 UNIT RATE (CONSENSUS 630,000) VS APRIL 610,000 (PREV 610,000)
08:30 16Jun10 RTRS-US MAY HOUSING COMPLETIONS -7.4 PCT TO 687,000 UNIT RATE VS APRIL 742,000
08:30 16Jun10 RTRS-US MAY HOUSING STARTS DROP LARGEST SINCE MARCH 2009, RATE LOWEST SINCE DEC 2009
08:30 16Jun10 RTRS-US MAY HOUSING PERMITS RATE LOWEST SINCE MAY 2009
08:30 16Jun10 RTRS-US MAY SINGLE-FAMILY HOUSING STARTS -17.2 PCT, LARGEST DECLINE SINCE JAN 1991
08:30 16Jun10 RTRS-TABLE-U.S. May housing starts fell 10.0 pct

This is important data that effects nearly all sectors of our economy, the commodities used to build are in less demand, resulting in a low demand for work in all these different sectors - too many to name, but take a moment and think about what goes into new construction... then think about what made our country great... building did.

All things considered, I do not think our market is going to slide much further down, although the recent headline news that just broke about TBW being charged with mortgage fraud and the misappropriation of one billion dollars in funds may compromise our market slightly.... after all they were involved in issuing and writing the vary notes that are being bought and sold on the mortgage backed securities market. The questions this new indictment brings may cost us in pricing.