Le Denouement

The final outcome. Real estate IYR has met key technical points that indicate reversal is imminent. It might not be much of a turn at the start, but the market rarely announces its intent.

Time spent analyzing real estate seems like forever; it’s actually only been a few weeks. The daily chart above, puts it into perspective.

For the most part, trading and positioning action has been focused on the tiny circled area. Not advice, not a recommendation.

To be concise, we’ll list the known facts about the current juncture.

  • IYR is at Fibonacci 76.4%, retrace level from the down move that started in February – March last year.
  • Price action has met a Fibonacci 61.8% projected move off ‘a-b-c’ wave action from the January 12th, 2021 lows.
  • While meeting that 61.8% projection, price action formed a terminating wedge; complete with a throw-over early in the session yesterday.
  • Price action closed below the prior near time high of 88.11 (close was at 88.07).
  • High levels of volume over the past four sessions, indicate distribution; just as it indicated accumulation at the beginning of the current move. The “Book-Ends”
  • Successive lower momentum energy with each net upward close since April 9th, 2020.
  • Supporting the potential for market reversal, bonds are at short level (and price) extremes and the dollar has already reversed.

The area of interest shown in the daily above has been expanded to hourly charts below:

It may be a little hard to make out the Fibonacci numbers (61.8%, circled), but early yesterday, price action posted higher and reversed off the Fibonacci 61.8% level.

The hourly below, shows in addition to meeting Fib targets, a terminating wedge had also been formed:

The last chart, the daily, has IYR posting right at Fibonacci 76.4% retrace of the entire down move from February – March last year.

If IYR does not reverse at this juncture (or within tenths of a point), then it’s headed to much higher levels.

Considering all the facts; the extremes, bonds, dollar, and now gold and silver in a deflation impulse; significantly higher prices for IYR seem unlikely indeed.

Stay Tuned

Note:  Posts on this site are for education purposes only.  They provide one firm’s insight on the markets.  Not investment advice.  See additional disclaimer here.

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