Unless one lives in a cave, most everyone knows Real Estate had a good deal to do with the economic and stock market weakness in 2007 & 2008.  The DJ Home Construction index was a great “leading indicator” for the economy as it started turning lower back in 2005.

From 2008 to present, the Home Construction Index and IYR have reflected a ton of relative strength as they have gained over twice what the 500 index has off the 2009 lows.

Of late both of these Real Estate based tools above, hit a key Fibonacci resistance level while creating bearish rising wedges At (A) in the above chart, both are breaking below support.  For the first time in a long time, both of these reflected relative weakness yesterday, losing almost twice what the broad market, even though the Dow was down almost 200 points.  One day does not make a trend, yet this weakness should be respected a ton!

Premium and Sector Sentiment extreme members are short Real Estate.  You can see why they are and get a “Free Real Estate Report” at the bottom of this post (see post and get report here)

The economy and broad market need this sector to remain strong….respect its message if it doesn’t!

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