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You might be hard pressed to find an index that lost more than the DJ Home Construction Index did from 2005 to 2008. This index was almost “Crushed” as it lost over 85% of its value during the 3+ year decline. The decline was so large that even though the index is up over 80% from its 2008 lows, it isn’t even above its 23% Fibonacci resistance level (not shown).
A key test for the Homebuilders Index and XHB/IYR is taking place now, as the index is attempting to break above a resistance line drawn from its all time highs.
The broad market needs banks to break resistance as well as key the Real Estate sector!