The Set-Up
Well, there it is.
You can see what the expectation is for the next open.
If HD, moves higher, then the set-up is (potentially) invalid. Lower, and we could be in the trading channel (not advice, not a recommendation).
Stay Tuned
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The Danger Point®, trade mark: No. 6,505,279
Bear Market Bounces
Home builders, and home improvement stores (HD, LOW), were up across the board on a policy announcement to support the housing sector.
Of the top three (market cap) builders, DHI, LEN, PHM, Lennar (LEN) has the weakest price action as we’ll see below.
On this site, we’re interested first, in the strategic position of the market; then, second, the tactical opportunity for a directional move.
Thirdly, is the focus part. There’s no ‘diversification’ but a zeroing into what price action says maybe the best opportunity (not advice, not a recommendation).
Strategic Position
The ‘Residential Construction’ sector topped-out way back in October, of 2024.
As of Friday’s close, even ending the week +10.2% higher, it’s still down (from all-time highs) -18.29%
Lennar Corp LEN, Quarterly
Looking at the long-term view.
The chart says it all.
Lennar looks ready for ‘implosion’ (not advice, not a recommendation).
Stay Tuned
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The Danger Point®, trade mark: No. 6,505,279
Plan The Plan
Know what’s happening now; then plan for what’s likely to happen.
There could be only a small window of opportunity to acquire needed items (at a deep discount) to whether a sustained level of social, financial, and infrastructure chaos.
It’s no secret the clothing retailers are, and have been offering product at heavily reduced prices.
What about the really important stuff?
Stuff like tools, generators, chest freezers and ‘protection’.
Home Depot (HD) Weekly
We’ll get straight to the analysis; showing HD may be forming an H&S pattern, about to break below the neckline.
If HD breaks lower in the vicinity shown (may or may not happen), expectations are for a measured move to the area somewhere around $160-ish.
A drop like that represents a decline of about – 62%, from all-time highs; plenty of motivation for herd following ‘corporate executives’.
That would be the time and the location to expect those executives to throw in the towel and offer product (the good stuff) at a deep discount.
The ‘Experiment’
If there’s another market leg lower, it’s likely to be chaos.
Banks may restrict access; credit cards may not work, and nobody will want to part with actual physical cash; likely to be in short supply.
With that in mind, a product has been picked from a Home Deport nearby that would definitely be of use in a grid-down, social chaos situation.
The ‘Generator’
So, here it is. A dual-fuel generator.
It’s a bit pricey at nearly $1,000.
Let’s come back to this if and when HD gets to $160-ish and see if our grid-down product is ‘on sale’.
Stay Tuned
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The Danger Point®, trade mark: No. 6,505,279
Interest rate sensitive markets are on the move … lower.
Updated 3:02 p.m. EST, as noted below
Fastenal (FAST), Home Depot (HD), Lowes (LOW), Real Estate (IYR), Weyerhaeuser (WY), Homebuilders (XHB), all taking a hit early in the session.
In their own way, there’re interest rate sensitive and related to real estate, construction or maintenance.
Since mid-January this year, real estate, IYR was identified as a potential strategic short opportunity.
Numerous shorts (via DRV) were opened, some exited (not advice not a recommendation).
On February 25th, it was obvious in early trading, this is it.
Reversal at hand.
The last of the shorts via DRV was opened and documented here (not advice, not a recommendation). Now in today’s session, we have a completed wedge and apparent downside breakout in progress.
There’s a lot of congestion to get through before (if and when) IYR reaches ‘free-fall’ territory. A lot could happen between now and then.
Even so, it’s fairly safe to say, price action’s not likely to come back to the IYR session high.
But that’s exactly what it did … and pushed just a bit higher (+0.15-pts).
So, we’ll set the DRV stop at that location (session low) … approximately 9.41; not advice, not a recommendation.
With the above push, the DRV stop will be set at today’s session low (currently 9.39).
Stay Tuned
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The Danger Point® 