American Tower: Update

AMT reaches another Fibonacci target.

We’re going to stay with chart labeling and retrace positioning as described in the last update.

The fact price action oscillated around the previous target (early in the session), then moved up, tells us there’s a more significant pattern at work.

Using that, we look at the AMT close. The ‘x’ location was a 38.2% retrace. Now, today (‘z’) we’re right at 50%.

Note the advance as slowed.

Net distance covered today is significantly less.

The parent index, real estate IYR, could not follow through to the upside; even after Friday’s aggressive move.

At session close, IYR just posted a reversal bar on the hourly chart.

We’re remaining short via DRV (not advice, not a recommendation).

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.

Elliott Wave: American Tower

Paul Harrell likes to start his videos with:

‘The next twenty minutes are going be long and boring. You might want to skip to the end to see the conclusion.

His rabid and loyal fans then proceed to hang on every word of his self professed ‘boring anecdote’ until the very end.

Not saying this site’s in the same league as Harrell’s.

Just saying, the following is going to be a tedious discussion of American Tower (AMT) and how it just might be ready to start an Elliott Wave III, down.

Market Extremes:

Its been no secret. The markets are at price levels and valuations never before seen.

In this site’s opinion, going long anything, is insane.

There could be a break, upset, world event, container ship run aground (oh, wait…), cyber attack, volcanic eruption (oh, wait …), major earthquake, nationwide weather freeze (oh, wait…) food supply disruption (oh, wait…) bond bear raid (oh, wait…) currency devaluation, or any myriad of disconnects that would instantly change the dynamic.

Change the dynamic in such a way as to make low-risk long exit, or short positioning impossible.

This site has documented several times where major brokers have already gone off-line as a result of markets fluctuating to the upside.

What happens when it turns down? Good luck getting out.

Looking for the (short) entry:

Its been an on again, off again, and back on again affair with shorting real estate, IYR. Anecdotal evidence such as Jerimiah Babe’s updates from his area, show the market’s been vaporized and is not coming back.

We’ve shown from a Point & Figure chart perspective, IYR has built significant price action congestion.

In Wyckoff terms, congestion equals potential.

The IYR index has built enough congestion that if/when the reversal comes, price action has potential to decline below the 2009, lows.

American Tower (AMT) Symmetry:

Now, for the analysis of AMT.

We’re going to start with the daily chart which has an interesting pattern of equal distance moves (or waves):

This equal move structure gives a hint that something’s up. The market’s moving in an orderly fashion. But what order?

To add more intrigue, we’ll go to the weekly chart. We see each retrace of the two initial waves, was Fibonacci 62%.

The last retrace (up to Friday’s close) is essentially 100%.

Looking up Elliott Wave “equal waves” turns up this presentation. It helps some but does not cover the current situation. The take away from the video is that equal waves do occur.

Looking at the daily close chart of AMT gives us this:

The Wave 1, down is placed at the low extreme. Price action then corrects to pivot (magenta oval) at the Fibonacci 38.2% retrace level.

It’s a near perfect retrace.

The reason to think AMT just finished a complex correction that terminated at “z” which is also “2”, is the structure of the fifteen-minute chart below.

The first chart is unmarked except where price action changes character:

Then we put in the Fib projection tool at that location; the inflection point, to get the following:

Incredibly, the top of Friday’s price action is also a Fibonacci target (423.6%) projection.

Getting back to the daily chart and labeling it using the above information gives us this:

Removing all but the labels is more clear:

There could be other ways to label the structure. It may become (very) apparent at the next open whether this interpretation is correct.

However, coupled with yesterday’s analysis of IYR, and its technical condition (at the extreme), we get the sense we’re close to some type of price action hesitation or outright reversal.

Summary:

We’re short this sector via DRV (not advice not a recommendation).

Price action appears to be at extremes and is meeting Fibonacci and support-resistance levels simultaneously.

Not related but an interesting coincidence (maybe): Van Metre’s update on Friday night:

“Is This a Sign Real Estate Prices Have Peaked?”

The futures markets just opened … S&P down 7-points. Let’s see what happens next.

Stay Tuned

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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.

American Tower, Leads Down

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.

Real Estate Top

It’s about an hour before the close and real estate, IYR is struggling to reman above resistance.

Two charts are provided in this update. Weekly and hourly.

The big picture is the weekly.

Resistance at 88 – 90, level is clear.

The second chart is the hourly.

Price action on the hourly can be seen posting above resistance for about three trading days. Then, it reversed lower this past Tuesday, the 16th.

The largest cap in this ETF, AMT remains in its own down trend.

Today, it attempted to move higher but that higher level (around 229.50) could not hold.

At this juncture, AMT (chart not sown) is trading lower near 228-level.

AMT has been discussed previously. Most recent update at this link.

Summary:

Real estate, IYR is testing the attempted breakout higher during today’s session. So far, that test is not able to hold; indicating weakness.

In addition, last week’s up-volume contracted by -65% over the prior (breakout) week.

There is apparently no (or very little) support at these levels.

Market Positioning (not advice, not a recommendation)

I have maintained my firm’s position short this sector via DRV, the 3X inverse of IYR.

If IYR can’t get significantly above resistance during this session, the long awaited IYR top and reversal may be at hand.

Charts below:

Hourly chart of IYR

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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.

AMT: Downside Leader

Early in the session, looks like AMT is leading the way lower.

In addition, a new pivot may have been established along with a new (lower) trend line. Subsequent price action will determine if we’ve seen acceleration to the downside.

Separately, IYR has just posted a new daily low … helping the case for reversal (and not ‘throw-over’) at this juncture.

The firm maintains its short position via DRV (not advice, not a recommendation).

Separately, bonds (TLT) broke lower at the open which was unexpected.

The long position in TMF (3X TLT) was exited just after the open. Not advice, not a recommendation.

Even though expectations are for TMF to recover, we’re not going to wait around and hope.

One gets the sense events are happening quickly at this session. Was the Texas blackout the ‘event’ to trigger a market reversal?

It’s possible. Real esate, IYR now trading lower at -1.38%, just 90-minutes after the open.

Stay Tuned

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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.

Throw-Over, Or Not?

IYR’s in a terminating wedge … will it throw-over, or reverse from here?

American Tower (AMT), the largest cap in the ETF, bounced off a 23.6% projection during last Friday’s session.

That keeps a short term bullish possibility alive. Longer term, AMT still remains in a downward trading channel.

Bonds and the dollar continue at extremes. On the dollar side, it looks like a significant bottom is in the works.

Weekly UUP, MACD has posted a bullish divergence along with an MACD lines cross (to the upside) signal.

Bonds (TLT) remains at its near term lows; near support levels formed back in September, 2019.

IYR is right at the upper wedge boundary and volume (upside pressure) has dropped significantly.

It could still levitate higher … however, it seems that getting a significant ‘throw-over’ is going to require more energy than is currently available.

We’ll see what price action has in store for Tuesday’s session.

Stay Tuned

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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.

American Tower, Revisited

Last week, the analysis of American Tower Corp., signed off with this:

“The expectation for the coming week; AMT continues its reversal and takes the IYR sector with it.”

The chart above was provided to support that analysis.

The chart below shows the result:

So, AMT met expectations by reversing on cue. Did it take the rest of the market (IYR) with it? Before that’s addressed, let’s look more at AMT.

The 3-Point P&F chart is shown below with projected targets.

For over a hundred years, this is how P&F charts are used to identify potential.

Price action indeed, met the target and then reversed.

What’s more, we can see AMT bounced off the top of the projection (~216) area first, then came back to the target.

AMT then went on a counter-trend move to ~238, before again, reversing lower last week … which brings us to now.

Stated several times in these updates, if and when IYR reverses, because of its own price action, it will create even lower targets.

A good illustration is to use AMT:

Now that its moved lower, met targets, rebounded only to reverse again, we have a new projection.

When and if IYR reverses, it will create similar downside targets.

The daily chart (below) has AMT price action overlaid with Fibonacci projections to lower levels.

It might be a little hard to see but Friday’s action bounced off (exactly) at the 23.6%, projection.

What this means is, AMT price action is “respecting” the Fibonacci level.

That gives high probability the level is valid. If we really are in a continued AMT reversal, now we have high probability downside targets.

Tying this all together and using the weekly chart of AMT (with the Fib targets) we get this:

Note how the 1:1 projection (shown as 100.0) is near exact at the March 2020, low of 174.32.

Price action itself defines what levels are important.

The ultimate P&F projection of 84 – 117, is far below what’s shown on the weekly chart.

However, AMT: 77 – 78, does correspond to Fibonacci projection at 261.8%, … very near the ’84’ P&F low.

There’s a lot more to AMT and IYR but the post has gone on long enough.

There’s also no guarantee AMT and IYR will meet any projected levels. That is the way of the markets.

However, what’s being done is to (continue to) present a significant case for long-term sustained downside reversal; carrying the real estate sector to levels (ultimately) below that of 2009.

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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.

Real Estate: At the Pivot?

Just a few minutes into the session: IYR has posted a new daily low. Friday’s low, 89.75 was penetrated quickly.

We’re in nuanced territory.

IYR is hovering as if undecided.

Price action could recover and go on to new highs. However, looking at the weekly chart above, IYR filled the gap during last week’s action.

American Tower, AMT (researched over the weekend) has also posted a new daily low; potentially confirming its long-term reversal.

We’re at The Danger Pont: This is where risk is least.

Maintaining short IYR via DRV (not advice, not a recommendation).

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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.

AMT: Case For Reversal

The largest cap equity in the real estate sector IYR, is American Tower Corp. (AMT).

We’re going to spend some time dissecting this equity but first, let’s look at the big picture (above).

The same chart is posted below having two areas highlighted with blue circles.

Zooming into the upper-right circled area (shown below). The circle has been removed to help provide clarity on the technical situation:

Next, we’re going to add a trading channel to the chart:

Now, we’ll zoom into the daily charts:

Drilling down even further on the daily:

From a fundamental standpoint, AMT has a P/E of 55, and is yielding an anemic 1.94% (as of 2/5/21, bigcharts).

That compares to a current TLT, yield of 1.55%

The last three earnings releases have each been downward surprises; averaging -6.6%, against expectations.

Getting back to the technical condition.

The second weekly chart had two areas circled. These are the only two places (in over fourteen-years of price action), where the 50-Week MA is pointed down at similar angles.

The first circle, AMT was rising into the declining MA as part of a long term bullish reversal.

The proposition at this juncture, based on fundamental and technical conditions, AMT is rising into a declining 50-Week MA as part of a long term reversal to the downside.

Price action is the final arbiter. Anything can happen.

The next earnings release for AMT is scheduled for February 25th (Yahoo Finance) so it’s not going to be a near term factor.

The expectation for the coming week; AMT continues its reversal and takes the IYR sector with it.

Stay Tuned

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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.