AMT’s the big cap leader in the real estate sector, IYR. Four weeks ago, a potential reversal was covered in this report. Since then, it’s been a dramatic move to the downside.

Early Session Update, DRV as noted below:

The weekly chart above, shows about 20-months of price action. Included (but faint to see) is the Fibonacci projection tool.

The same chart below, has key areas highlighted for clarity.

At this juncture, AMT’s adhering (almost exactly) to downside Fibonacci projection levels.

However, once it becomes obvious, markets tend to break away from predictable paths.

So, we’ll see what happens next.

At this point, there’s no doubt, AMT’s reversed down and not showing signs of a bottom

Positioning:

The firm’s position has not changed. We’re short this sector via DRV (not advice, not a recommendation). The last update noted the short position was increased during Friday’s late session rally.

At the trader’s discretion, DRV position is being maintained (past the soft-stop).

Summary:

This week’s action may tell us if we’re going to continue oscillating about the axis line discussed here, or if now’s the time for a decisive move lower.

In a forthcoming report, we’ll discuss market alternation and how the character of the AMT reversal has changed.

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.