Housing vs. S&P Revisited

**tsptalk** · 09-05-2008, 04:44 PM

Do you remember this housing vs. S&P 500 chart? It said the S&P lags the housing market by 12 months, and that we could see some downside in stocks...

Well, the S&P fell, but certainly not to the 600 level as this chart showed as a target. Perhaps it needs a logarithmic chart by percentage rather than points.

Anyway, here is a new housing chart going thru August 18, 2008. The NAHB housing index is the pink line...

**fabijo** · 09-11-2008, 06:05 PM

Here, I put the HMI data alongside the S&P data (lagged one year) into Excel. Here's where we're at:

I'm not sure if the correlation continued.

**tsptalk** · 09-11-2008, 06:20 PM

Cool! Thanks fab.

**Show-me** · 09-29-2008, 09:04 PM

Just a reminder the NAHB Housing Index is at 18.

http://www.nahb.org/generic.aspx?genericContentID=529

**James48843** · 10-06-2008, 10:46 AM

Man those are ugly charts.

Yep= that's the one I was looking for. Thanks.

I need a drink.

**James48843** · 10-07-2008, 09:06 PM

Bump.

This is where we are going.

**Mike** · 10-08-2008, 10:27 AM

If you look at the housing index back to its inception in 1985, the "correlation" between it and the S&P + whatever lag you wish to apply disappears. The S&P climbed for the most part, regardless of what this index did between 1985-1995. Here is the link: http://images.google.com/imgres?imgu...ctive%26sa%3DN

Here's some interesting reading: http://www.investorsfriend.com/S%20a...0valuation.htm - according to that analysis, the S&P 500 fair value could be anywhere from the 700s to where it is now, depending on earnings / PE assumptions.

**tsptalk** · 10-08-2008, 02:16 PM

Good find Mike.

**James48843** · 10-08-2008, 02:54 PM

Great find Mike.

I especially liked the second one.

It is the first appearance of "this is where we are supposed to be, and I told you so four years ago".

Which is another--ever so small- indicator of the bottoming out in my book.

**Mike** · 10-08-2008, 02:57 PM

Once in awhile I'm good for something.

**tsptalk** · 12-24-2008, 01:53 AM

Originally Posted by fabijo

Here, I put the HMI data alongside the S&P data (lagged one year) into Excel. Here's where we're at:

I'm not sure if the correlation continued.

fabijo -

The S&P has dropped about 500 points since your update. Do you have the ability to spit out an updated chart - without too much trouble?

Thanks!