Fake Breakout

It’s possible yesterday’s real estate breakout was false.

This update includes three charts; two are on the weekly time-frame and one, is a 30-minute chart.

Yesterday, IYR barely nudged the resistance zone and attempted to hold. Late in the session, price action eroded a bit into the close.

We’re in a terminating wedge.

This type of action is counter-trend. Price bars overlap and are struggling against the main trend which remains down.

The 30-minute chart (above) has more detail.

Barely able to hold the highs, price action is at the boundary. Like yesterday’s update on XOP, we have IYR in a similar position:

At the edge of the lake.

Pre-market action is highly unusual (because of the wide spreads) in the IYR inverse funds SRS and DRV. However, that’s what we have now.

Pre-market in DRV points to a higher open (lower for IYR).

Anecdotal evidence from Jerimia Babe, shows us nobody’s home; a wide swath of vacant rea estate. It’s reasonable to say, this situation is repeated in various degrees nationwide.

We’re still short the sector (via DRV); admittedly it could have been better. Not advice, not a recommendation.

From a strategic standpoint (for the firm), it’s an initial position and so not too concerned about the draw-down.

At this point, two outcomes are possible with one more probable.

First, IYR price action may continue on higher (less probable) and if so, we’ll have to exit DRV.

Second, and based on pre-market action, IYR will open below yesterday’s highs, then a potential upward test, followed by downward action.

That may all happen today or over a number of days.

Lastly, based on news and internet scuttlebutt, no time will be wasted on destroying what’s left of the economy and remaining vestiges of the middle class.

The final nail could include a swift, unrelenting market collapse that includes seizure of IRA accounts (at minimum). A topic researched long ago with more detail in the link above.

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.

Real Estate: Subdividing Lower

Lower highs, lower lows, real estate (IYR) is subdividing.

The weekly close (above) has upward thrusts getting shorter, stalling out, then reversing.

Note the massive volume; up over 234%, from the week prior.

Drilling down to the daily, price action rose slightly (last Friday) to close just under the axis line.

We’re still below the 23.6%, retrace as reported here.

Volume evaporated on the session; declining 60% from the day prior and indicating not much interest to the up-side.

This is the danger point where the risk is least. If price action continues higher from here, it’s possible IYR may attempt a new high.

Price action declining (more probable), indicates the pivot’s in place.

Right now, bonds are stretched; ready to reverse along with the dollar.

Those two markets may put the kibosh (big time) on risk assets if they short squeeze.

Recall that IYR did not follow the rest to new highs. For months, it’s been languishing, building congestion.

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.

Real Estate First?

Real estate IYR, may be leading the way down

Price action has been at the lows for three days and not retracing higher.

The overall markets are at all time highs … IYR can’t seem to get going to the upside.

Well traded inverse funds for IYR are SRS (2X inverse) and DRV (3X inverse); not advice, not a recommendation

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.