There have been two main reasons when VNQ has outperformed SPY.
1. When Real Estate was the hottest thing since sliced bread
2. When SPY Has gone into a sideways or down market
With Real Estate prices being hot while commercial beaten up
VNQ net has out gains but subpar to SPY. That seems to be changing
based on this ratio setup. I venture to say it will likely...
EMA50/EMA200 as support
Near demand Zone
Plan A: Sell PUT under 80 for now.
Plan B: Buy Call spread in the demand Zone
I am not a PRO trader. I trade option to test my trading plan with small cost.
The max Risk of each plan is less than 1% of my account.
If you like this idea, please use SIM/Demo account to try it.
Rates rates rates. Lower interest rates in the US are a tailwind for US RE and result in US RE outperforming Global Ex-US Real Estate.
The US RE vs. Global Ex-US RE ratio is breaking down is priced at January 2020 levels
THE FED'S HOLDINGS OF MORTGAGE BACKED SECURITIES IS GROWING FASTER THAN DURING THE 2008 GLOBAL FINANCIAL CRISIS!
QUARTERLY MORTGAGE DELINQUENCIES JUST SMASHED THE PREVIOUS RECORD FROM 2008!
THE GLOBAL COMMERCIAL MORTGAGE MARKET IS IMPLODING!
MARKETS ARE COMPLETELY IGNORING THIS FACT!
It looks like they have structurally underperformed the market as a whole, and even with the yield differential being +2%, they still get crushed. Seems like a lot of people are paying a lot for weak-ish cash flow and "peace of mind". It looks like the only time they outperformed was between 2009 and 2010 after getting obliterated compared to the market.
THE FED IS ATTEMPTING TO BAIL OUT THE CORPORATE DEBT BUBBLE THROUGH THE DIRECT PURCHASE OF CORPORATE BOND ETFs (SIMILAR TO 2008)!
THEY HAVE NOT COMMITTED TO BAILING OUT THE MORTGAGE SECTOR TO THE SAME EXTENT, INDICATING A SECOND WAVE OF SELLING IS POSSIBLE!
I DON'T THINK IT IS POSSIBLE TO SHORT SELL VNQ BUT IT WOULD BE PROFITABLE!
"Defund the police" millions say. "Defund the government" 3 and a half people say.
Free stuff for everybody! A republican congress might veto the budget but it will still end up huge, just not as huge.
A family or a business, when they are broke or out of money, they will reduce spending, they will only buy essentials.
The government does the opposite. The...