It’s taken over six months for real estate’s IYR gain a net positive 1.9%.
The S&P eclipsed that many times over during the same time frame; gaining nearly 19%.
As with earthquakes, cracks in the system appear to start small and then build to a massive disconnect.
Behind all the shiny object headlines, commercial real estate looks terminal. While the rest of the market powered to new recovery highs, IYR went flat-line.
Today’s close may be important.
We’ll see if somehow IYR is going to break out of the six-month sideways action, continuing higher or if this is it; no more upside.
Currently, the firm is short the sector with a negative return. Possibly a debatable position. However, if IYR is going to stall and reverse, this is a high probability location.
It’s not much different than Van Metre’s approach to the bond market. We know how the game is played. The market remains at manic levels … just waiting for the catalyst.
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