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Pisani: New Home Sales Have Odd Effect on Stocks

New home sales of 308,000 for February, below consensus estimate of 315,000, is the lowest on record. Record keeping on new home sales began in 1963.

Since hitting a high of 400,000 sales in October, we have declined four straight months, even AFTER a revision for January, revised up to 315,000 from 309,000.

Stock indices actually rose modestly after this announcement, much to the bafflement of many traders. This low-volume, low-volatility meltup — on good or bad news — has many old-timers shaking their heads, but they were doing the same thing in the third quarter of last year, when many shorts were blown apart by a relentless rally.

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