Housing … just keep your head in the sand OR are the clouds forming? UPDATE

11/14/2016 – since the Election, the XHB ETF has taken off like a rocket ship.  You can see below that it hit the .618 retracement from the Spring low of 16′.  Upper targets are being shown in around 34-35.

were still working w/ the thesis that the 39 level was the completion of a major sell signal for the homebuilders.  This straight up action of late is something to watch closely for this thesis to hold.

of note, a friend of mine sent me this headline:

home

the rise in foreclosures last month was the highest since the big crash.  Something to note .. however, the annual rate is still declining.  Is this a divergence forming and a potential inflection point? I don’t know … but price/time will tell us.

Bonds are getting smoked of late causing rates to rise …

For those who have followed me you know that I’m usually ‘first to the party’ and ‘see’ things months if not a year in advance. that’s what patterns tell you … i’m not trying to put any spin on this folks.  We are at ZIRP, I have houses all over the place going into standing inventory status, rates are rising and we just had a ‘big’ increase in foreclosures last month. Remember – almost a year before anyone paid attention to the Chinese Yuan I saw the BIG JUMP and said … this is something to notice.  (https://bartscharts.com/2014/12/06/most-important-chart-to-end-2014/)

So, that’s all I’m doing again ….

Also, take notice of the big time SELL PATTERN FAILURE  on the Banking Index. Multi-level chess game going on right now … trust the patterns and they will all line up. That I know …

Do well, be good and rock on, always.

Bart

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I sold my house in VA and moved out to SoCal to rent .. did it for a number of reasons. The NUMBER 1 reason was to learn how to Stand Up Paddle-board Surf and enjoy the weather.  YES, I understand it’s financial suicide out here .. the taxes are crazy, the cost of living is crazy but the surf is good man …

I was SO HAPPY to unload the house … why?  Well, I think we are on the verge of another big old smack down in housing.  Of note, my post from March 2013 (yes, 3+ years ago that the home builders had topped in/around 32 did not come to fruition. In essence the pattern failed .. so, it went up to the .786 and also completed the 1/8th signal reversal candle.  Now, we’ve rallied right back up to the .786 level and are at the demarcation point.

Study:

  • this ETF doesn’t want to go below 27.  Big support …
  • also, note the AB-CD projection down to 25.40 – if we crack from here expect support there and if BULLISH this will hold and bring it to new highs. If it fails … watch out below.
  • THOSE are the levels to watch …
  • sure looks like a MONTHLY H&S pattern for this ETF … doesn’t it?

To finish the story about San Diego … I was driving around the other day and noticed TONS of standing inventory …plus the houses were selling for 850K to 1.0 + MM.  Folks, that dog don’t hunt man …

Also, the PATTERNS suggest a MAJOR top in bonds which means higher rates … so, it’s been 3+ years since my last post on home builders.  It’s moved, a little, perhaps it will move more, but man this sure looks like a BIG top is coming in housing ….

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Here’s the Home Construction and Home Builders ETF (ITB and EHF)

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Again, folks, it’s just PATTERNS. Sometimes they work, sometimes they don’t … but at least we have some guides to support what could (could being the operative word) a BIG OLD THUMP in housing …

Bart

 

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