Keystone's Housing Sector Indicator is Flashing Extreme Caution

Keystone's proprietary trading algorithm, Keybot the Quant, that has been operating for 10 years and in development for 10 year before that, incorporates a housing sector parameter into the model. In February 2012, the red line crossed above the green line in the chart and Keystone called the official start of the housing recovery that continues to the present. At the time, doom and gloom was rampant in the stock market and the universal consensus was that a dust bowl will continue and become worse for America.

Stocks had peaked-out in October 2007 and the crash occurred in late 2008 as Lehman Brothers went belly-up. The stock market continued falling apart into March 2009 when Federal Reserve Chairman Bernanke, and the other officials at the Fed and Treasury, stepped in to save the stock market to protect America's wealthy privileged class.

The rich were screaming bloody murder as their huge stock portfolio's were collapsing so Bernanke, Paulson and others that protect the privileged class intervened to pump stocks higher. This action is indisputable proof at how capitalism does not exist in America. The United States is best described as a 'pseudo free market crony capitalism financial system'. The banks and other companies such as GM and AIG were saved to protect the wealthy class and here we are a decade later with the wealthy richer than ever while the common people suffer through years of unemployment and underemployment.

The divide between rich and poor in America is now the widest in 50 years but the wealthy do not care since they raped the system for all its worth and they got theirs courtesy of the Keynesian stimulus provided by the central bankers. The central bankers perform the bidding of the wealthy since they receive lucrative fees from token speaking engagements after they leave public office. Bernanke was handed $250K for showing up for a few hours at a Wall Street investment banking conference a couple months after he left office. This is America's crony capitalism system on full display.

All that shameful activity aside, the housing market signaled great things ahead in February 2012 and that coincides when Fed Chairman Bernanke declared that he would provide "QE Infinity" for the stock market. Look at the huge rally in stocks ever since. It was a turning point for the country in that 2012 time frame since that is truly when the middle class, poor and disadvantaged were spit on by the wealthy that control the nation's economy and markets.

Fast forward to 2017. Cracks were forming in the housing sector last year and in June 2017 Keystone's housing indicator threatened to signal downside trouble ahead ending the 5+ years of bullish joy. However, the housing market recovered. Then, in November 2017, same thing. The housing market was wobbling threatening to roll over but the housing and stock market bulls put off the day of reckoning once again.

Here we are in August 2018 and Keystone's proprietary indicator is once again threatening bad things ahead for the housing market. The last two months are very sick and the indicator is very close to creating a negative cross (red line may cross down through the green line). At that time, Keystone will call the end to the housing market rally that began in February 2012.

Note the happiness in stocks that occur with a strong housing market and you can surely expect the opposite outcome when Keystone's indicator signals the end of the housing sector rally at any time in the weeks ahead. The negative cross may occur any month forward. We are moving towards the Fall and winter months in the States and housing activity would be expected to seasonally slow which would aid the bearish outcome. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.