Quick psychology: with the Fed having eased rates aggressively, POTC does believe existing home sales will improve before new home sales do. The last report was 4.93M units sold and this estimate is for 4.85M units sold. Strangely, economists feel existing home sales will not improve. IF the number of home sales can beat the previous 4.93M and trump the 4.85M estimate, the clamour about a recession will be muted.
A boring Friday trading session will result due to the three day weekend ahead; Monday, May 26th is Memorial Day. POTC reminds our readers about Shanda Interactive (SNDA) Q1 2009 reports Monday night, SO if anyone does want to roll the dice, Tuesday's SNDA open will not be for the faint of heart, as you will be tied to any earnings fall out. POTC sees SNDA finally breaking out to the higher valuation it deserves; the Chinese Dragon's tide is raising all ships of late: SOHU, BIDU, SINA, and even JRJC, which we recommended shorting, oops... The Chinese economy is not showing any signs of slowing and unless talk of the Yuan devaluation gets louder, it would be wise to stay long China. We recommend buying SNDA $45 June calls with a chance the stock FINALLY takes out the mid $40 range like a fire breathing dragon. We're expecting a climactic move come Tuesday morning.
The Psychology of the Call team wishes everyone a healthy and happy Memorial Day weekend to all our U.S. readers.