Reits
Real Estate Paints A Very Clear PictureThis, my Custom Real Estate Index, paints a very clear picture that RE does not like the recent FED rate increase and is under pressure. One could state that investors are fearful that RE returns could be pushed towards the negative and that the US Real Estate markets could "roll over" with another Fed rate increase.
Right now, the price channel and regression channel are the only keys we have to price boundaries. My theory is that any further breakdown would be cause for grave concern as this could be the start of a much deeper bearish trend. Yet, be cautious initially as this could be a "washout low" formation setting up like we saw in 2016 (elections).
That reminds me, be prepared for some unusual price swings before the US Mid-term elections. The 30~60 days prior to any election are usually quite volatile.
Be cautious of the Real Estate sector right now. One or two more Fed rate hikes and this sector could turn into a falling knife very quickly.
I'm actively looking for a bottom to setup. It would help if the Fed decreased rates or started discussing a balanced forward approach to rates.
REITS Index, Tadawul, Where we are from an Elliot Wave POV?Hello All,
Tadawul declared that the Saudi Market requires more listed Reit Companies in Saudi Arabia TADAWUL:TRTI , and they justify that there is a need and more demand from investors. It has been one year so far and we do not see such demand from an Elliot wave principle, which makes us produce two theories of Elliot Wave
1- We are facing a temporary trade-able ABC Correction up, then it will continue going down for a while.
2- It is the end of Wave 1 where it traced more than 100%, and we are in a long position for a new wave up.
Either ways, the indications that we see today is to go up and we recommend to go long. We are more in fav of the above first opinion, however, we need to see how this goes in the long RUN.
Go long.
UK Property REITS are on the move - targeting 62% retracementUK Property REITS including Derwent (DLN) have today closed above their 38% retracement levels following brexit.
Having been long DLN from 2400 on 7th July, this provides a bullish signal indicating that resistance has been successfully broken (following a week's worth of testing) and that price should rally towards 3019 in the next few weeks.
Should we see a reversal and two consecutive daily (or one weekly) close below 2717, then this hypothesis would be invalidated and REITS such as Derwent with similar pivots could be considered as shorts (targeting a new swing low having retraced the entire move).
Long at 2750 with a target of 3017 and stop (on close) at 2625, should provide a 2:1 payoff over the next month
(Suggested levels are for illustrative purposes only - you trade at your own risk)
Real-Estate Looking as Bearish as the Stock Market, Buy $DRVWhat is this chart? This is the MSCI Real-Estate Investment Trust (REIT) Index, it is the Index that DRV is backed by. DRV is a 3xLeveraged Short Real-Estate ETF.
Why is it important? Because if you buy DRV while RMZ is crashing you can make some pretty insane returns. If you look at the Elliott Wave count on this chart and on the related SPX500 chart you will see that the counts are basically the same, it appears that we are in the midst of a non-limiting triangle that is at the end of a double combination. This means that both the Stock Market and REITs are going to stop growing for the next year or two and then at some point, after the triangle is complete, they are going to collapse. This basically means that the entire US Economy is going to go to shit like it did in 2007-09. Since it is a double combination that would imply around an 80% retracement of the Bull run starting in 2009.
(SPX500 - Multi-year Elliott Wave Forecast...)
How do we know if this chart is correct? Well we already have the break down out of the channel, and triangles are generally pretty easy to detect even in the very early stages. It also appears that there is significant momentum resistance and we are finding some resistance underneath the channel as well. There's also a perfect double top with the peak we made in the beginning of 2007. At this point it would take a whole lot for this to actually be able to push above the high, and I'd say that it is more or less confirmed. If the high is broken then it may be a good idea to change to a neutral economic outlook until more data is available.
Remember that DRV is the big play here. The gains made from shorting RMZ are nothing compared to what DRV could be worth in a recession. The only reason we look at RMZ is because it is the underlying asset for DRV and because it's wave patterns are much more clear.
The clouds are definitely dark over Cyclical City, I would be seriously cautious about being invested in housing and anything that is cyclical in nature for the next couple of years. The market has had a good run for the last 7 years but now it looks like its time for the cycles to change and for the Economy to once again enter into a bearish period.
Another interesting thing I noticed when I accidentally analyzed the wrong chart, is that the MSCI Inc. Stock (The company that makes these Indices) looks like it could be reaching a peak. This would still be pretty speculative since there are no confirmations but it could be telling as to the overall strength of these indices and the stock market.
Real-Estate Not Looking Good? Buy $DRV (Elliott Wave Analysis)What is this chart? This is the Real-Estate Investment Trust (REIT) $MSCI it is the underlying asset for the 3xLeveraged Short Real-Estate ETF $DRV.
Why is it important? Because if you buy $DRV during a housing market crash you can make some pretty insane returns, and if you look at the Elliott Wave count (unconfirmed) you will see that $MSCI has possibly just completed Wave-c of an Extended Zigzag. Since it also ended with a terminal impulse it means that at a minimum Wave-c needs to be completely retraced but since we are completing an extended zigzag, and we are most likely in a triangle, it is highly unlikely that we'd retrace ALL of the entire zigzag because, based on my stock market count, we are in the 2nd "Three" of a major correction that started in 2000.
What does this mean? It means that if my chart is correct the Real-Estate market, and the US Economy, is about to collapse. The process will be slow and painful but this is a perfect starting point for it., the stock market is also reaching a nice high at this point it has basically triple topped. It seems like my related chart will probably continue to be right and the stock market growth will pretty much come to a halt and then the whole market will fall through the floor after about a year. I except there to be blood in the streets by the end of this. It will be at least as bad as 2007-09.
So how do we know if this chart is right? Well first of all it's still extremely speculative (lower probability), if you wait for it to first break the lower yellow line, and then to break the red and blue lines, it will have more or less confirmed the Wave-c impulse and also the entire Zigzag. If you wait until the blue line there is still plenty of profit left but you did miss out on quite a bit (especially on $DRV) so it may be a good idea to take the risk of being wrong and start moving capital into this trade now. Since Wave-c ends on a terminal it needs to retrace the terminal in 50% or less time it took, and typically its much faster than that. This means that if this chart does end up being right the housing market (and in particular $MSCI) is going to crash very fast and very hard within the next year.
How do we know if this chart is wrong? Well this would be the tippy top so if it moves up even a little bit from here it would be a good idea to stop-out and wait for a break down before taking this trade. That means that if you take the trade now on $DRV your R/R is over 1:1000. If you wait until there's a break down your R/R isn't quite as fantastic but the probability that this chart is correct increases substantially because it eliminates any other possibilities I may have overlooked.
Remember that $DRV is the big play here. The gains made from shorting $MSCI are nothing compared to what $DRV could be worth in a recession. The only reason we look at $MSCI is because it is the underlying asset for $DRV and because it's wave patterns are much more clear. Again this is a very speculative and risky trade at this point it's definitely not recommend that you get overly aggressive until this trade has more confirmations!
The clouds are definitely dark over Cyclical City, I would be seriously cautious about being invested in housing and anything that is cyclical in nature for the next couple of years. The market has had a good run for the last 7 years but now it looks like its time for the cycles to change and for the Economy to once again enter into a bearish period.
Short PCLPCL is one of the weakest stock in the Real Estate industry. REITS have been underperforming the S&P.
This is a good candidate to short in a strong downtrend (see daily chart). Ideally, a short should be opened on a retracement to the 20 MA in the day chart.
Short Office REITSMacro:
The Short term spike in yields triggered a large selloff in REITS. As mentioned in the 10 Year yield post, The yields are likely to rebound until at least end of year which could put downward pressure on REITS.
Technicals:
USDH is underperforming the S&P which is setting up for a possible short across the board over the next weeks.
The bearish divergence YTD and the recent new low today suggests that price could start reversing from the uptrend YTD.
Ideally, a short position should be entered on a weak stock within that weak industry after a retracement to the 20 DMA and a downtrend confirmation on the day chart.
Initial target: the 61.8% fibo retracement to 148