Most of us remember the 2007-2009 financial crisis because of the collapse in home prices and its effect on the economy.
One key sector that tipped off that crisis was the home builders.
The home builders are an integral piece to our economy and often signal “all clears” or “short-term warnings” to investors based on their economic health and how the index trades.
In today’s chart, we highlight the Dow Jones Home Construction Index. It has climbed all the way back to its pre-crisis highs… BUT it immediately reversed lower from there.
This raises concerns about a double top.
This price reversal has the Index testing its steep rising up-trend support line at (1). If this important sector index breaks support at (1), it would send a negative message to the broad market. Stay tuned!