Position Change

DRV pushed through our stop early in the session; position closed (not advice, not a recommendation).

1:50 p.m. EST:

Despite all the analysis, IYR is showing continued buoyancy.

Something else is going on; possibly related to Uneducated Economist’s link provided in the last update.

Taking his cue, a functioning mortgage market is all important to the financial narrative, it’s possible this market will be more heavily manipulated than others.

At this juncture it would make sense. All indications are for reversal … yet it’s not happening in any significant way.

Time for another trade.

We’re going back to a market that in retrospect, should’ve been the focus all along; Biotech.

This site’s coming from the perspective those reading, are well aware the ‘speck’ as we call it (to avoid censorship) was a fabricated event.

Just a reminder that we’re not some ‘Johnny come lately’, here’s the link from way back in May, last year.

That post proves the situation was figured out well before the May 17th publish date (interviews, observations conducted a month prior).

What’s not fabricated however, are the repercussions from the so-called cure for the speck.

Unfortunately, those are happening now and are quite real.

Moving on to the trade.

Despite the number of transactions shown in the Project Stimulus table (below), the objective is to minimize activity. We’re looking for a mid, to long term sustainable move; gain potential, 100% to 1,000%.

Updated previously, very long term (Quarterly) IBB has reversed.

Monthly and weekly have reversed as well; both the monthly and weekly MACD indicators point down. Daily is essentially flat.

The hourly chart of LABD (3X inverse IBB) shows the entry location and subsequent price action. Stop is the session low @ 22.23 (not advice, not a recommendation).

It’s worth repeating, the false narrative on the speck and consequences of speck protection may blow up in the media (and biotech) at any time.

As J.P. says, getting people to do something they know is bad for them (or lethal) is the ultimate ‘elite’ high.

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.

Technical Discussion, Real Estate

“Depending on where that close is … “

That, from the last update on real estate, IYR

Price action is extracting every last bit of up-side. We’re down to the five-minute chart (above) to discuss yesterday’s move.

Any time price action penetrates a low or support level, it automatically puts that action in ‘spring’ position. Sometimes the selling is just too strong and the spring set-up fails immediately.

Other times (like yesterday), it holds.

Another way to look at it; for IYR to move higher, it had to go lower to get the needed fuel (penetrating support levels). Only this time, and depending on the data provider, IYR closed unchanged or up 0.02-pts.

So, the range in our recent technical discussion(s) has gone from 9.77%, to 1.83%, to 0.60%, 0.27%, and now, yesterday, 0.0%.

Before a market can go down, it has to stop going up … looks like we’re there or at least at the point where reversal is highly probable.

The hourly chart has the characteristic where volume spikes indicate trend change or potential change. The right side of the chart has the spikes but no direction change … yet.

Separate but related, Uneducated Economist gives his take on potential government ‘incentives’ for real estate.

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: Outside-Down

It’s about 11:55 a.m. EST, IYR just posted outside-down.

There are four hours to go before the close. Depending on where that close is, we may have a key reversal in IYR.

Key reversals (aka outside-down, or up) are one of the more reliable indications of sustainable trend-change.

Of course, IYR has been closely monitored for several days with indications reversal is imminent.

This may be it.

Our Project Stimulus chart has been updated to include the market defined (as of this morning) stop level (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.

More & Less

Volume increases on IYR; range contracts even further.

In what’s beginning to look like its been taken straight out of David Weis’ training video on ‘trend reversals’, volume has surged and range has contracted drastically.

The last update had range contracting down to 1.83% (from 9.77%).

Now we’ve got yesterday’s range down to 0.60%; volume up to 18-million shares … the highest since October 2nd, last year.

One of two things is happening.

It could be absorption for a new leg upward to ever higher, highs.

Or

It could be distribution and ultimate reversal.

There’s certainly enough fundamental evidence to show commercial and residential real estate, may have gone off the cliff.

Still, we have headlines like this, from ZeroHedge.

The key is the “hottest real estate market since 2007”, part. Remember this magazine cover?

We’ve got what appears to be conflicting data. ‘Over the cliff’ on one side and ‘red-hot market’ on the other.

The answer’s in the price action. We’re at a potential (major) inflection point. The market leads the news and not the other way around.

If we’re at the pivot, about to head lower, bad news will be forthcoming after the reversal’s in place.

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.

Real Estate, Inverted

The inverted chart of IYR, shows the extremes of current price action.

The chart has a compressed time scale which may be hard to see. It was necessary to present it this way to show extreme action.

The prior update, has a wedge ‘throw-over’ that’s been one year in the making. The daily above, has its own terminating wedge formed over a six-week period.

The important part, is the range and volume.

Back on November 9th, 2020, there was a large volume spike and a move whose (total) range equated to 9.77%

Thursday, April 1st, was a similar volume spike but total range was just 1.83%; a huge (range) contraction when compared to the prior move.

This tells us massive volume is not having a significant result. Of course, if the volume persists, sellers in this area will be absorbed and IYR will move higher.

If not, this could be distribution; a reversal can be expected.

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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: Prints and Fails

IYR made an unexpected print high; then failed to hold into the close.

The inverted chart of IYR puts it all in perspective.

It’s obvious we’re working the area of IYR, where medium to long term reversal is possible. The inverted chart shows how each successive thrust lower (blue lines) covered less net distance.

Instead of exiting out of DRV, then getting back in, the position was held with the expectation new IYR, print highs would not hold.

They didn’t.

Not only that, there was plenty of intra-day kabuki:

Early session lower, then reversal to new highs, then fail and lower close. Anything can happen but IYR’s upward action looks exhausted.

If IYR had maintained its new high into the close, DRV would have exited (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.

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

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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: 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.

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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 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

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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.