Real Estate Paints A Very Clear Picture

This, my Custom Real Estate Index, paints a very clear picture that RE does not like the recent FED rate increase and is under pressure. One could state that investors are fearful that RE returns could be pushed towards the negative and that the US Real Estate markets could "roll over" with another Fed rate increase.

Right now, the price channel and regression channel are the only keys we have to price boundaries. My theory is that any further breakdown would be cause for grave concern as this could be the start of a much deeper bearish trend. Yet, be cautious initially as this could be a "washout low" formation setting up like we saw in 2016 (elections).

That reminds me, be prepared for some unusual price swings before the US Mid-term elections. The 30~60 days prior to any election are usually quite volatile.

Be cautious of the Real Estate sector right now. One or two more Fed rate hikes and this sector could turn into a falling knife very quickly.

I'm actively looking for a bottom to setup. It would help if the Fed decreased rates or started discussing a balanced forward approach to rates.