As you know, key economic data pulls from past results to report their findings.

But Wall Street looks 4-6 months ahead to dictate that day's trading activity.

That's why you often see confusion when economic reports hit the tape -- because investors try to take a lagging indicator that's reporting economic activity as of one month ago and apply it ahead for the next 4-6 months.

This fact, by itself, causes an ample bout of confusion.

And this constant fight between forward projections and trailing economic figures has had the most impact on the status of stocks in the U.S. Housing Sector.

You see, today's home-price index report, which is calculated by the Office of Federal Housing Enterprise Oversight, is expected to show a nationwide decline in housing values in 2007. This will mark the first time that year-over-year housing sales will show a decline since this data began being collected in 1975.

It would appear that this figure would have a negative impact on housing stocks, but in reality, today's effect is virtually a non-event. As I write, for example, the PHLX Housing Sector Index (HGX) is only down one point. And the reason for the insignificant move is based on the forward-looking projections contained in the study.

You see, according to top some housing experts, we will witness a mid-year recovery. So although the current statistics look bleak, much of the bad news has been already priced into the housing-related stocks. So in a way, news of a mid-year recovery could actually be considered bullish!

In fact, many agree that housing could actually make a positive contribution to economic growth in the second half of 2007. And for Wall Street, that means the time to get positioned is now.

*Operational Note: This will most likely be my last Market Report commentary for the week, as I'm headed off to the Orlando Money Show. If Adam and I do write on Friday, it'll most likely be a quick Money Show update.