Trading Channel, A ‘Mile-Wide’

We all know something’s coming; we just don’t know what.

A century ago, Livermore said, ‘surprises typically come in the direction of trend’.

Back in August, this update said if certain conditions were met (trend breakdown), then real estate has ‘enormous downside potential’.

Since then, events have unfolded to increase the probability of downside for IYR (not advice, not a recommendation).

The weekly chart of IYR spells it out. We’re in a (potential) massive downside trading channel.

Real Estate IYR, Weekly

From the left side low (October 2022), to the right-side test two weeks ago, is Fibonacci 55 weeks, plus one week; well within an acceptable margin of error for timing.

Anything can happen and IYR could somehow power higher into more testing or a channel breakout.

Until then, positioning in this sector remains as follows (not advice, not a recommendation).

Positioning

The current short position via Leveraged Inverse Fund SRS, is identified as SRS-23-03.

The initial entry was documented here and here.

Hard Stop is SRS 19.25, with a Soft Stop (discretionary) at SRS 19.79 (not advice, not a recommendation).

As of Friday’s close, initial position profit is about + 5.7%.

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