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Wednesday, January 7, 2009

Nibbling Short on Realestate, Again

In yesterday’s comment on Foreclosures Triple: Housing Recovery is Just Crazy I was asked if I was getting into SRS (UltraShort Real Estate ETF). I have indeed begun to scale. Below is my technical rational:

Price is up against the resistance of the declining 50 day EMA (red line) and above the support of the rising 20 day EMA (blue line). Horizontal support also exists around $35 where prices bounced off the October low.

The real serious resistance can be found around the $43 area at the 38.2% Fib. I've started scaling into SRS because I'm not confident that IYR will make it that much higher.

Other more macro reasons are:

McClellan Oscillator, Super Overbought
Bullish Percent Index, Flashing Warning Signs
Good Start to Year, Beware Bear Wedge
Volatility: Stretching Into Oversold
Percent of Stocks Above 50 Day Moving Average: Overbought


SG said...

Hi Ben, welcome back.

When will it be time to get back into SKF, and what do you think of the 3x products (FAZ)? (too much slippage in too short a time?)

Also what do you think of Tim's call on SDP? I'm thinking utilities may be a hiding place for long only funds and therefore shorting XLU is not worth much. I'd like to know if you disagree though.

Ben Bittrolff said...


I would agree with you. They've got to hide somewhere. Utilities being an essential service will be protected at all costs by the gov't. Utilities also throw of divies. So after some comrpession (most of which has already occured) I'd expect them to just be dead money...

Unknown said...


Thanks for your post.Yes the government will try to proteect essential services at all cost.