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SHORT VNQ, GET OUT WHILE YOU CANI have been tracking this ETF for a long period of time. We just broke one-year resistance and clear evidence on the fib retracement (specifically level 0.5) shows that the price was weakening. Technicals aside, there is no reason as to why this should move upwards. This pandemic has taken out firms with high leverage, left more than 25 million Americans jobless, and monetary policy hasn't been as effective because people haven't been going out. Not only that, but the government will also now have to think twice about their spending, as our debt has dramatically increased this year accompanied by a significant drop in tax revenue. Consumers have less income and are looking towards their savings to live through this pandemic. As we move to reopen, firms will look to deleverage and cut spending. This means that unemployment will most certainly not go back to its previous levels anytime soon and the average American will be in no position to take in debt in the form of a mortgage. I'd even argue to some extent that many will look to sell their homes. So how does this relate to VNQ? Home prices haven't adjusted because a decrease in supply helped remedy the decrease in demand. If you analyze active listing for the months of April, you will see that in almost every market, there has been a significantly smaller number of homes being listed. Hence, there have been fewer homes being sold at the price pre-virus. These price levels were already thought to be reaching a bubble, but with this sudden change in demand, these prices will correct most certainly. As we look to reopen, people will look to sell their houses. Realtors will push people to sell their homes. This increase in supply accompanied by the withstanding lack of demand will drive housing prices all the way down. I expect we will see these prices fall in areas with typically less demand than others first. Looking at listings in suburban areas, we are already seeing sellers change listings and drop their price, with still no buyer. It is still early to get out as prices haven't adjusted and many cities haven't reopened. Now, residential real estate accounts for 14.53% of VNQ. The problem lies in commercial real estate, 40.48% of VNQ. As said before, firms will want to deleverage and cut spending. Not only that, but offices will be dead anytime soon as many companies will want to remain online for the next quarter or two. The only downside will have to do with hospitals and clinics, but as we flatten the curve, the need for hospitals will not be any larger than the need for them a month or two ago. Regarding specialized REITs, there are going to be numbers of people that will not be able to pay rent or will find the price of rent too high in comparison to their income. All in all, all we can see is red! Hopefully, this doesn't truly occur because many will be hurt by this crash, but it is hard not to warn against the inevitable.
AMEX:VNQShort
by FrancescoChiappe
Bitcoin is enticing bearsI am not impressed with the pennant breakout confirmed on the daily chart on Thursday. While it is a bullish continuation setup, the shape of the Thursday's candle, which confirmed the breakout, is indicative of buyer fatigue. Its the long upper shadow that takes the shine off the breakout. Also, rallies into or above $7,000 continue to be sold into. The cryptocurrency has failed at least 4-5 times to penetrate or keep gains above $7,000. All in all, its no longer a constructive chart and suggests scope for a fresh drop. Prices may drop to $6,138, under which a major support is seen near $5,850. I would consider buying once I see a convincing candle – one with small or no upper shadow – on the hourly chart or a green marubozu candle on the 15-min chart, marking a breakout above $7,000.
BITSTAMP:BTCUSDShort
by OmiFX8
1
Nailed supports precisely! Now what's next?Hey guys. Quick post to let you know that I'm watching these moves closely. Neutral stance right now with longer term (months out) bull bias. Any dip below our supports in the chart above signifies and longer correction which could last weeks before we continue up. If we dip below our supports ( the red trendline and purple horizontal on the RSI), we'll end up back below the 20 cent mark and stay there for a few weeks. This is a bull market, therefore, I am not expecting the longer term correction. But, it could happen. It is wise to keep some cash on hand for this scenario. Our 200MA sits right above 20 cents right now. At the very least, we may kiss that one last time before sailing to new highs. But I am not even sure this will happen. These bulls are buying every dip. My only hesitation is lack of volume. Where is the volume on these move? For these reasons, I remain neutral with bullish bias above our supports. I would turn slightly bearish below our support, with the understanding that the correction will be longer. But overall I would still be longer term bullish even below 20 cents. Dipping below 14 cents would cause me to become bearish longer term. The latter is the least likely scenario IMO. Happy trading folks.
by stewdamus
2