Seasonal Cyclical Secular

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Is it Secular?

The U.S. Case-Shiller 20 City Composite housing data to July 2014 were released and looking at the M/M and Y/Y charts it's easy to see that seasonal buying has again collapsed as we batten down the hatches against the coming winter.

The 2014 M/M peak failed to breakout from under the 2013 M/M peak and the 2014 Y/Y momentum has been in a down trend since 2013 as well.

The downturn is seasonal for sure and looks like a cyclical down trend as well with lower highs being put in after the run up out of the 2009 Pit of Gloom.

If U.S. housing is in a secular down trend, it began way back in 2004 (see the Y/Y data) and we should see momentum attempting a test of the Pit of Gloom. That would take a big shift in sentiment in the animal spirits.

What could cause that?

• Credit market distress? 
  
• Currency revaluations?
• Negative income statements?
• Amortization fatigue?
• Rereading Orwell?

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