I’m impressed the rally has held through the afternoon.  There is no news today that is a real catalysts for the market, which is simply oversold on a short term basis.  Beneath headlines, there are signs that bode well of the potential of the economy and stock market.

Housing Market

The lull in so-called soft data continues today with the NAHB Homebuilder Index, which came in slightly below Wall Street consensus, but it is still high enough to suggest strong potential upside in the housing sector this year.  The reading of 68 is down from 71 last month, the highest reading in 11 years.

More importantly is traffic among prospective buyers, which remains in expansion mode (above 50 reading) for the fourth time in the past three months.  Remember before crossing into expansion, buyer traffic was in contraction from more than a decade. 

I continue to see major signs, from family formation to builder sentiment, which suggests a boom in housing, aided by regulatory relief and greater availability of product.