• Homebuilder Confidence Rises. On Monday, it was reported that the National Association of Home Builders/Wells Fargo confidence index rose to 29 from a revised 28 in May to reach its highest level since May 2007. Apparently, less expensive properties and record-low mortgage rates are fueling demand and encouraging homebuilders to take on new projects but any sustained momentum will depend on access to credit while more foreclosures keep adding to the supply of homes.
• May Housing Starts Fall While Permits Rise Sharply. On Tuesday, the Commerce Department reported that new housing starts for May fell 4.8% to a seasonally adjusted annual rate of 708,000 units while new housing permits rose 7.9% to the 780,000 level - a near four-year high. Its worth noting that new housing starts data is subject to significant revisions and April's data were revised upward to the 744,000-unit level from a previously reported 717,000 unit rate for the highest reading since October 2008.
• Existing Home Sales Fall. On Thursday, The National Association of Realtors reported that existing home sales fell 1.5% to an annual rate of 4.55 million units in May - in line with analysts' expectations. However, the median price for home resales rose 7.9% year over year to $182,600 in May to reach its highest level since June 2010 due to a shortage of lower priced homes.
• Jobless Claims Fall Slightly. The Labor Department reported that jobless claims fell slightly by 2,000 to fall to 387,000 claims but the four-week average rose by 3,500 to 386,250 claims. In other words, the labor market remains weak and there was nothing in the latest claims figures to suggest its going to get better any time soon.
• Manufacturing in the Philadelphia Region Sinks. The Federal Reserve Bank of Philadelphia's reported that their general economic index fell from minus 5.8 the previous month to minus 16.6 in June for the lowest level since August as manufacturing slows. Ironically, the region's manufacturers grew more optimistic about the future as the index of the outlook for six months improved from 15 to 19.5 in May.
• Manufacturing Slumps in Europe and Appears to Be Contracting in China. Finally, London-based Markit Economics has given an initial estimate that shows Euro-area manufacturing output shrinking at the fastest pace in three years in June as Europe's debt crisis continues. Moreover, HSBC Holdings Plc and Markit Economics has given a preliminary reading of 48.1 for the Chinese purchasing managers' index. Given that any reading below 50 indicates contraction, it appears that manufacturing in China is also slowing.

It appears that the poor manufacturing data more than anything else is what sank the markets on Thursday and why Goldman Sachs is now recommending that clients build short positions in the broad S&P 500 index based on expectations of continued economic weakness. In other words, traders and investors alike may be in for a long hot summer. Hence, be sure to check NextCandle.com every day for our latest stock market predictions as volatility can also mean profits for savvy investors and traders alike.

NOTE: THIS PIECE WAS JUST POSTED ON THE NEXTCANDLE.COM BLOG.

• May Housing Starts Fall But Permits Rise Sharply. On Tuesday, the Commerce Department reported that new housing starts for May fell 4.8% to a seasonally adjusted annual rate of 708,000 units (Note: This figure is prone to significant revisions) but new housing permits rose 7.9% to the 780,000 level - a near four-year high. Nevertheless, April's housing starts were revised upward to the 744,000-unit level from a previously reported 717,000 unit rate for the highest reading since October 2008.
• Homebuilder Confidence Rises. On Monday, it was announced that the National Association of Home Builders/Wells Fargo confidence index rose to 29 from a revised 28 in May to reach its highest level since May 2007. Cheaper properties along with record-low mortgage rates are fueling demand as well as encouraging homebuilders to take on new projects. On the other hand, any continued momentum could take time as access to credit remains limited while more foreclosures keep adding to the supply of homes.
• Foreclosure Filings Spike Higher. Last week, RealtyTrac reported that foreclosure filings in May spiked 9% compared with the previous month as 205,990 properties in the US received filings that ranged from default notices, scheduled auctions and bank repossessions. May was also the first monthly rise since January. To make matters worst, there was also a 12% jump in foreclosure starts while bank repossessions rose steeply by 7% to 54,844 after hitting a four-year low in April.

Of course, it's rising foreclosures and hence a rising supply of homes that investors in homebuilder stocks must be worried about. On the flip side, not every home buyer is looking for a really good deal on a foreclosed home that may have dated appliances and in need of a renovation. Moreover, the US housing market is really a patchwork of housing markets with some, particularly those in the South and West, being hit much harder than others by foreclosures but many homebuilder stocks are also national players with exposure to both good (if there is such a thing) and bad housing markets.

Nevertheless, the SPDR S&P Homebuilders ETF (XHB), which attempts to match the returns of the S&P Homebuilders Select Industry Index, is up over 21% since the start of the year, up 19% over the past year and up 30% over the past two years but still down over 37% over the past five years. Those recent returns are hard to ignore but so is the sheer number of foreclosures that continue to hit the market.

Hence, investors without a strong stomach for risk may just want to sit on the sideline with homebuilder stocks while those looking to get in should keep the SPDR S&P Homebuilders ETF (XHB) along with a few homebuilder stocks on their NextCandle.com My Portfolio screen in order to keep an eye on them.

NOTE: THIS PIECE WAS JUST POSTED ON THE NEXTCANDLE.COM BLOG.

• Spirit Airlines (SAVE) had an 80% probability of making a higher high.
• Diana Containerships (DCIX) had an 88% probability of making a lower low.
• The McClatchy Company (MNI) had an 81% probability of making a lower low.

And the results on Friday when the market closed:

• Spirit Airlines (SAVE) opened higher at $18.95, had a trading range of $18.78 to $19.20 for the day and closed 0.95% higher at $19.03. Spirit Airlines (SAVE), which provides air services throughout the United States, the Caribbean and Latin America, was one of the few airline stocks moving higher as US Airways Group (LCC) fell about 4.3% and Delta Air Lines (DAL) fell 3.4% to drag down much of the airline sector.
• Diana Containerships (DCIX) opened at $7.39 and immediately sunk lower. However and by 11 am, Diana Containerships (DCIX) had rallied back to its opening rice, put in a range of $7.30 to $7.49 for the entire day and closed 0.40% higher at $7.45. Diana Containerships (DCIX), which is based in Greece and owns and operates eight containerships in the beaten down shipping sector, recently announced that it expects to pay a dividend of 30 cents per share for the second quarter, up from 25 cents in May thanks to earnings having been boosted by higher time-charter revenue and a bigger fleet size. Otherwise, Diana Containerships (DCIX) already has a forward dividend of $1 for an already dividend yield of 13.5%.
• The McClatchy Company (MNI), which had closed at $2.08 on Thursday, immediately opened lower at $2.05, had a trading range of $1.05 to $3.04 for the day and closed down 0.48% at $2.07. The McClatchy Company (MNI) offers an array of print and digital products plus it owns stakes in CareerBuilder.com, Cars.com, Apartments.com and HomeFinder.com. However, The McClatchy Company (MNI) is down about 925 over the past five years and more than 96% over the past ten years as it, like other newspaper stocks, struggle to figure out a new business model.

In other words and if you trade stocks like Spirit Airlines (SAVE), Diana Containerships (DCIX) and The McClatchy Company (MNI) in the volatile airline, shipping and newspaper sectors, NextCandle.com would have helped you to have a profitable Friday.

NOTE: THIS PIECE WAS JUST POSTED ON THE NEXTCANDLE.COM BLOG.

• Spanish and Italian Bond Yields Soar. On Wednesday, 10-year Spanish bond yields hit a euro-era record of 7% as investors fled to assets promising more safety. Italian 10-year bond yields have also risen by five basis points to 6.3% plus Italian borrowing costs at an auction of 4.5 billion euros of new debt also soared. In other words, confidence in European debt is continuing to deteriorate.
• Foreclosure Filings Spike Higher. RealtyTrac has reported that foreclosure filings in May spiked 9% compared with April as 205,990 properties in the US received filings ranging from default notices, scheduled auctions and bank repossessions. That was the first monthly rise since January plus there was a 12% jump in foreclosure starts. Bank repossessions also rose steeply by 7% to 54,844 after hitting a four-year low the month before.
• Retail Sales Were Mixed. US retail sales fell 0.2% in April and May thanks to a sharp drop in gas prices. When volatile gas sales are excluded, consumers barely increased their spending but sales of cars, furniture and appliances did increase - suggesting that consumers could be gaining more confidence in the economy. Nevertheless, consumer spending could weaken if income growth does not show signs of reviving.
• CPI Falls Sharply. This morning, the Labor Department reported that US consumer prices fell 0.3% in May, its biggest decline in three and a half years, thanks to a fall in gas prices as the gas index sank 6.8% - its largest decline since December 2008. It was also reported that inflation-adjusted hourly wages (on average) rose 0.3% in May thanks to a 0.1% rise in average hourly earnings and a 0.3% fall in the cost of living.
• Jobless Claims Rise. The Labor Department has also reported that initial claims for unemployment benefits rose 6,000 to a seasonally adjusted 386,000 while the 4-week moving average increased 3,500 to 382,000 from the previous week's revised average of 378,500. Claims have remained in the tight band since April with job growth in May being the weakest in a year after a weak performance in April.

In other words and as we head into summer and into an election year, the economy is looking weak but not completely bleak. Hence, it will be important to keep an eye on the latest economic headlines as well as our NextCandle.com stock predictions as the stock market is bound to be in for more choppy sessions.

NOTE: THIS PIECE WAS JUST POSTED ON THE NEXTCANDLE.COM BLOG.

• Banco Bilbao Vizcaya Argentaria SA (BBVA). With a presence in 32 countries mostly in Latin America plus the USA, Banco Bilbao Vizcaya Argentaria SA (BBVA) is over 150 years old - which may or may not be reassuring for buy and hold investors. BBVA is down over 26% since the start of the year.
• Banco Santander SA (STD). As the largest lender in the Eurozone, Banco Santander SA (STD) has plenty of exposure to the European mess as a whole. Nevertheless, the Banco Santander SA (STD) dates back to 1857 and its among the top 15 financial institutions worldwide in terms of market capitalization - meaning its "too big to fail." STD is down over 21% since the start of the year.
• Telefonica SA (TEF). With a presence in 25 countries, Telefonica SA (TEF) serves over 300 million customers in Europe, Africa and Latin America. TEF also ranks sixth in the telco sector worldwide in terms of market capitalization but its still down about 30% since the start of the year.

As you can see, all of the Spanish ADRs are actually sizable and fairly solid multinationals with operations spread throughout the Spanish speaking world or globally but due to being based in Spain, the market is raining on them and will probably continue to do so.

More adventurous traders and investors should take a closer look at the iShares MSCI Spain Index ETF (EWP) - an ETF that attempts to track all publicly traded securities in the Spanish market as measured by the MSCI Spain Index. The EWP has a market cap of $132 million and it's down 24% since the start of the year - meaning it's not particularly better or worst than the three previously mentioned Spanish ADRs.

However, investors should keep an eye out for any news regarding Spanish bond auctions and ratings, especially any ratings downgrades, on Spanish bonds and debt in general. After all, a poor bond auction or a ratings downgrade will (fairly or unfairly) impact Spanish ADRs.

Finally, it might be a good idea to add the above Spanish ADRs and ETF to your NextCandle.com My Portfolio page in order to keep an eye on them. After all, there will be both trading opportunities with Spanish ADRs thanks to the volatility engulfing European markets and a good chance to pick up shares (on the cheap) in what appears to be solid companies.

NOTE: THIS PIECE WAS JUST POSTED ON THE NEXTCANDLE.COM BLOG.

Of course, it should be remembered that Chinese copper demand remains lackluster. However, China still needs to import copper and restock supplies after running down inventories for some time. Traders have also noted that a global buyer is expecting higher copper prices in China in coming months and had shipped a large supply of refined copper from the United States to Shanghai in late March. That shipment may have arrived in May.

Otherwise, it should be noted that China 6 million barrels per day of crude oil, a record high, along with more iron ore in May but analysts are also warning about drawing overly optimistic conclusions. After all, actual demand from users remains weak and the bulk of oil and copper shipments could easily have been moved into storage.

Nevertheless and in early commodities trading in Asia and Europe, commodities were rallying but its worth noting that the S&P GSCI Enhanced Commodity Index fell 13% in May and is still down about 9.1% since the start of 2012 with the biggest declines being in coffee, natural gas, cotton and crude oil.

Meanwhile, Goldman Sachs (GS) issued a bullish commodities forecast saying that it expects a 29% return from the Standard & Poor's GSCI Enhanced Commodity Index over the next 12 months. Specifically, Goldman Sachs (GS) expects energy investments to rise 41%, base metals to rise 23% and precious metals to rise 18% while agriculture will loose 14%. Jeffrey Currie, the head of commodities research in New York, also noted in the report that despite macroeconomic uncertainties, the current sell-off in commodities is probably overdone with the price risks shifting to the upside.

Hence, investors and traders alike who want to take advantage of any coming overall upswing in commodity prices might want to take a closer look at the iShares S&P GSCI Commodity-Indexed ETF (GSG) which attempts to replicate the performance of the S&P GSCI Total Return Index (however, it should be noted that GSG is not registered under the Investment Company Act of 1940 - meaning an investment is highly speculative).

Likewise, investors and traders who want to bet that Monday's rally will be short lived should be looking at some of the commodity short funds offered by ProShares - a provider of leveraged and inverse funds that allow ordinary investors and traders to short the market. Fund offerings from ProShares include the ProShares UltraShort DJ-AIG Commodity (CMD), ProShares UltraShort DJ-UBS Crude Oil ETF (SCO), ProShares UltraShort DJ UBS Natural Gas (KOLD), ProShares UltraShort Gold ETF (GLL) and ProShares UltraShort Silver ETF (ZSL).

Finally and given just how volatile commodities have been, you might want to add a few of the above commodity ETF funds to your NextCandle.com My Portfolio page to keep track of our latest directional predictions and probabilities for them as there is bound to be more volatility in the weeks and months ahead - meaning opportunities for traders to profit.

NOTE: THIS PIECE WAS JUST POSTED ON THE NEXTCANDLE.COM BLOG.