Today’s price action in real estate (IYR) looks like a test of the failed breakout (up-thrust) from February.
This session, price action came all the way back to support (87.90), which is now resistance.
The important part, the level did not hold. Late in the session there was erosion and retreat to close well below the day’s highs.
This type of behavior is near textbook for a significant reversal.
From a trading perspective, the short position via DRV was maintained (not advice, not a recommendation) except for reducing the position by about 2.5% … essentially negligible.
Today’s test and erosion is one of those few times where probabilities are high; the market’s tested the up-thrust (failed breakout) and we can expect prices to decline from here.
One last note adding weight: Today is Fibonacci Day 8, from the high on February 25th.
With conditions noted, posting a test high today, then backing off … indicates downside ahead.
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