Expect more pain in the housing market next year, says Don Miller. Rising unemployment will keep the foreclosures coming. And as the backlog of inventories swells, Don says homebuilders still look ripe for shorting in this environment.

This from Money Morning:

The U.S. housing market is already being pounded by the “perfect storm.” And the outlook for the New Year is for the stormy weather to continue – and probably to get worse.

As if a locked-up credit market and tidal waves of foreclosures weren’t already enough, we’re now watching unemployment climb and consumer confidence plunge.

But even when the housing market is taking on water, there are ways to stay afloat. Indeed, investors nimble enough to maneuver can even make money.

The watchword on this market, though, is caution.  If an investor decides to test the waters, beware of the extraordinary financial undertow.

Here’s a look at what’s happening now, and

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At least, that's what the futures say.

I spent some time looking at the Chicago Mercantile Exchange's housing futures this week.  The futures are tied to the S&P Case-Shiller Home Price Indexes, and are the only liquid way to bet on where house prices are heading.

Right now, the futures all agree: home prices are going lower.

The longest-dated contract available expires November 2012. Using that contract, I looked at the most recent sale to see where the market thinks home prices will be in four years.  The data compare November 2012 vs. August 2008, because August 2008 is the last date for which we have index data available.

House Price Expectations

Nov. 2012 vs. August 2008

City

Price Change

Boston

10.29%

Chicago

0.00%

Denver

12.55%

Las Vegas

12.97%

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We are headed to Las Vegas this week and weekend for the Traders Expo.Here are the details:Las Vegas, NV: The Traders Expo, Mandalay Bay Resort,November 19-22, 2008Are you planning to attend?Here's a snapshot of some last minute fares to Las Vegas. There's another good travel site to consider called FareCast. They are good at forecasting airfares for flights and letting you know if a current price is above or below the historic average. They also developed a cool tool called FareGuard that lets you protect the lowest fare for one week without buying a ticket.We are hosted again by Scottrade this year as well as a couple of other new partners. Please look for us at their booth and talk shop.Presentations Not to MissScottrade's presentation on Thursday and see how Trade-Ideas excels inside the ...

The era that defined Wall Street is finally, officially over. Michael Lewis, who chronicled its excess in Liar's Poker, returns to his old haunt to figure out what went wrong. To this day, the willingness of a Wall Street investment bank to pay me hundreds of thousands of dollars to dispense investment advice to grownups remains a mystery to me. I was 24 years old, with no experience of, or particular interest in, guessing which stocks and bonds would rise and which would fall. The essential function of Wall Street is to allocate capital-to decide who should get it and who should not. Believe me when I tell you that I hadn't the first clue. I'd never taken an accounting course, never run a business, never even had savings of my own to manage. I stumbled into a job at Salomon ...

Tuesday November 14, 2008 Navivest

Shares of Wynn Resorts (WYNN) climbed over 5% in after hours trading yesterday, after Standard & Poor’s announced that it will add the company to the S&P 500 index. Stocks tend to rally on such news as it is assumed that money managers who try to track the stock market or match the performance of these indices, will buy the shares of the stocks being added.

This may not necessarily be the case that much these days as there are now single instruments money managers can buy that can effectively track the entire indices.

We have had Wynn Resorts (WYNN) on our watch list as a shorting candidate for the past six weeks and from intra-day lows of $41.50 on Friday 11/07, Wynn shares might open up $2.43 to trade at $49.25 today. That creates a

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Monday November 13, 2008 Navivest

Standard & Poor’s is making changes to the S&P 500 and the S&P 400 MidCap. Following are details of the changes:

Wynn Resorts Ltd. (WYNN) is replacing Ashland Inc. (ASH) in the S&P 500, Ashland will replace Lear Corp. (LEA) in the S&P MidCap 400, S&P MidCap 400 constituent DENTSPLY International Inc. (XRAY) will replace Hercules Inc. (HPC) in the S&P 500, and Bucyrus International Inc. (BUCY) will replace DENTSPLY in the S&P MidCap 400 after the close of trading on Thursday, November 13.

Ashland will be acquiring Hercules in a transaction that will result in a company with a market value appropriate for the S&P MidCap 400, and which is expected to close on or about that date, pending final approvals. As of today’s close of trading Lear Corp. had a market value of approximately $129 million, ranking 400th in the S&P MidCap 400 index.

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Since December 1998, EV Rentals Cars (EVTP.OB) has continued to expand to meet the growing green trend. EV Rental is the only rental company in the United States that offers a fleet containing only environmentally-friendly hybrid-electric vehicles. Currently, the company has rental facilities at 8 major airports including San Francisco, Los Angeles, San Diego, Phoenix, and Las Vegas. The company is on a mission to provide the most advanced green vehicles to the public and to raise the public’s awareness of the benefits of driving clean-fuel cars to increase the demand for these environmentally-conscious vehicles. EV Rental is led by an experienced team of professionals who are conscientiously growing the company and its fleet.

The idea to create EV Rental hit Jeffrey Pink in 1997 when he saw an aerial view of Los Angeles. The founder of the company saw the condition of the

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Friedman Billings Ramsey is out with a major downgrade on Auto Zone (NYSE:AZO) taking their rating to Underperform from Mkt Perform while lowering tgt to $110.At a minimum, the firm does not think that AZO's stock price will be able to keep up with its peers, nor with the overall equity market. As with other retailers, sales have likely slowed for the sector since the end of AutoZone's fiscal year (August, 2008). When AZO had last reported, comp store sales were +0.6% and had been helped for that period by the tax stimulus. At Gabelli's after-market automotive conference yesterday in Las Vegas, the firm found most companies generally cautious about current sales trends. Therefore, they estimate that AZO's same-store sales are currently tracking at -2% for 1Q09E.Separately, they are concerned that competitive pressures will accelerate for AZO, with AZO currently operating at hardline retail sector-high operating ...

Even with the auspicious news of Kazakh oil bypassing Russia on its way to American markets through a pipeline in Azerbaijan, there was good news: Russian oil production rose to its highest point in 2008 in October. Meanwhile, an abstract painting by the 20th century Russian artist Kazimir Malevich sold for $60 million at an auction in New York. Too bad Russia's planned Las Vegas-styled gambling mecca by the Azov Sea is on the fritz, at least for now. "It's just not going anywhere fast," said a representative from a U.S. firm that advised on developing one of the resorts. A new survey from VTB Bank Europe says a key index for Russia's manufacturing activity dropped last month to its lowest level since October 1998. And the Bank of Cyprus announces its takeover of Uniastrum Bank.

What are the two most expensive goods you’re likely to buy in your lifetime?  A home and a car, probably.  And the news today on both is an indicator of how screwed up things are.

The Washington Post figures the country has about one million homes too many.  And close to 30,000 of them are in Las Vegas alone.  “The solution, local executives say, will come not from Washington policymakers but from the market itself,” reports the Post. “When there are too many houses, builders stop building them. That has already happened, and many Vegas home builders have gone out of business.”

But of course, that’s not going to stop politicians from intervening anyway and trying to prop up home prices — that is, keep them unaffordable.  There was Jack Kemp, that paragon of supply-side virtue, stumping in Florida this weekend for John McCain and his $300 billion mortgage bailout.  Barack Obama’s

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