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Real Estate Ire Catches My Eye

I received this chart from Jason M. It is a very timely look at Real Estate after the glowing year of 2013 in the media.  The iShares IYR is an ETF tracking real estate. I have added the SCTR line so we can see how it ranks as an ETF.

IYR 20140129

As we can see, a very clean trend line supports the ETF throughout 2012 and 2013. However, the ETF has dropped in relative strength as shown in the SCTR. At 27.2, it is barely above the 4th quartile of ETF's. 

What makes it a more compelling chart for me is when we add two more lines.

IYR 20140129 Black Lined

Notice how the Head/Shoulders tops were both skewered coming off the head in the pattern and the right shoulder was a back test of the black trend line.  Investors should be aware of the big picture trend on the charts.

Thanks again for the great chart Jason!

Good trading,

Greg Schnell, CMT

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