Monday

DOW up 44. Actually, I was surprised it wasn't more, after the G7 meeting called for yuan appreciation. Translation: "we support a dollar slide, and we have joined forces to collectively devalue all our currencies against the yuan. We're not worried about inflation, because the yuan will suffer much more than we will." Then, the IMF said that the dollar is overvalued. Translation: "the dollar is dangerously overvalued, and we need to make sure the decline doesn't turn into a crash."

The traders took advantage of profit-taking in homebuilder shorts to try to squeeze them out. ITB was up 4%, led by the riskiest, BZH and SPF over 10%. I would have taken some profits at the open, but then I couldn't get back in, because the short ratio against them is so big. So, I will just wait. I expect to make everything back and more over the rest of this week with Existing home sales being reported Wed. The consensus calls for a 5% decline to 5.0 million. However, I see a 20-25% decline. Socal sales dropped 35% in August, and the national drop was 20%. September Socal sales came in at -49%. Divide that by half, and that's my number. If I take any profits, it will be in TOL, and it will be on Fri., perhaps.