Real Estate … Test & Reverse

Probabilities Are High, For Lower Action

Real estate’s in the … well, it’s in the outhouse; we’ll leave it at that.

Today was the day where IYR had the opportunity to build on any momentum gained over the last two trading sessions (Thursday, Friday).

Today, the index posted a new daily high within about fifteen minutes after the open.

Then, it spent the rest of the day trying to move higher.

Additional new highs weren’t happening; about a half-hour before the close, price action began to fall away.

That’s where we are now.

IYR Daily Close

The next chart makes the situation more clear.

There’s a Head & Shoulders top, a neckline, break of the neckline, test and reverse.

The fundamental pressures continue to build.

Interest rates remain elevated but even if they come down, it’s already in the works; buyers don’t qualify, layoffs are starting in earnest and it’s all unraveling … very, very fast.

This very same scenario has been played out in history; over and over, bubble after bubble.

We’re now in a multi-year, to multi-decade decline (if it ever recovers).

Measured Move

The chart above shows a measured move target in the area of 83.5, for IYR, providing that price action continues its decline.

The chart in the prior post, had a Fibonacci projection to the 80.5 area. So, the targets are similar.

Actually, this is what we want.

If we can use different analysis methods to come up with essentially the same target, it increases the probability of meeting that target (not advice, not a recommendation).

Positioning

The DRV position remains active; DRV-22-02.

If IYR posts a new daily high at tomorrow’s session, it points probabilities to either a protracted choppy test, or a rebound to higher levels; if either of those scenarios take place, the position will likely be exited.

Stay Tuned

Charts by StockCharts

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.

The Danger Point®, trade mark: No. 6,505,279

One response

  1. Pingback: Before The Open « The Danger Point®

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