If … It Holds

We’re on Fibonacci Day five of the real estate reversal; this could be the turning point for the next leg lower.

When looking at the daily close of IYR (below), it’s clear, if yesterday was the attempt to move higher, as of this morning, that attempt, has failed.

If downside price action holds, we have IYR only able to retrace a Fibonacci 23.6%, of the down move from the November 3rd high; very weak indeed.

Real Estate IYR, Daily Close

The initial move lower was a Fibonacci three days.

Then, the test (yesterday) and now today, a new high of 0.01-pt, (from Tuesday’s high) before posting lower.

Anything can happen.

A retrace of only 23.6%, is rare.

Typical retrace amounts are 38.2%, and 50%.

The action we are observing, could just be a set-up for a future, higher retrace.

Positioning

In the meantime, I am remaining short this sector via Leveraged Inverse Fund SRS (not advice, not a recommendation).

That trade is noted as: SRS-23-03.

The position stop has been moved from SRS 18.70 to SRS 19.25, with today’s low of SRS 19.79, as a discretionary stop (not advice, not a recommendation).

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