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Real Estate has been on a roll over the past few years, moving strongly higher off the 2009 lows. Two months ago today the Power of the Pattern shared that the last time the Home builder’s created this pattern the S&P 500 fell 50% in value (see post here)
The inset chart above reflects that over the past two months IYR has lost 11.8% and ITB has lost 15%. These price peak and declines in Real Estate took place at the exact same time the Nikkei was hitting its 20-year resistance line!
Similar performance took place back in 2005/2006 as the broad market played a game of “Catch Up” with Real Estate…. the S&P 500 followed Real Estate’s decline.
Will it be different this time?