Adding DRV in this area. VNQ going downThe golden age is over. Actually I have no idea what I am doing other than throwing darts at the dart board. This trade may work, it may not.
VGSIX trade ideas
VNQ/SPY Stagflation trade?Surprised to see reits continue their underperformance against the S&P, I understand how most market participants view reits as a long term rate play (yields down reits up etc) however I think the market is not taking into account that reits should perform "relatively" well in a stagflationary environment. In other words reits might get a stagflationary bid.
pivot playEntering here via DRV for a short trade. Bail if the daily closed above the entry (circle).
Low Risk via DRVUsing DRV to short VNQ off this pivot. Hopefully it holds, limited losses if the sell pivot holds.
A longer term entry for short VNQ via DRVI will be dabbling with DRV until this Monthly goes back to a buy. I think this is a position of maximum opportunity to enter short real estate.
Warning Shot Based on the previous CoT report, asset managers are short the Real Estate index 9,247 contracts which is 1,184% more than their average in 2020, and 840% more than their average 2019 positioning. Large deviations in asset manager positioning are good indicators of sentiment and risk.
For example, asset managers increased long positioning in the Energy sector around Dec 2020 by over 300%, taking it as high as 400% greater than average positioning. Energy has been outperforming and they remain overweight the index.
Last year they were overweight Real Estate and I recommended buying MPW
The trade worked out well and is still a good long term play, however, I've exited my VNQ position and trimmed down MPW in light of this warning signal.
This large deviation in short positions could be related to the rate hike expectations, however, if they don't pull the trigger on rates then REITS will squeeze much, much higher.
Other notes from the CoT report, changes against the 2020 average:
Asset Managers - Long the US dollar +324%
Asset Managers - Long Energy +261%
Asset Managers - Long Financials +204%
Asset Managers - Long Dividend index +408%
Hedge Funds - Eurodollar short +309%
Hedge Funds - 3-month SOFR short +2,710%
Why im all in on Vanguard Real Estate ETFAs a thirty-something-year-old investor, I’ve been contemplating my investment strategy. Diversification is a common recommendation, but is it truly my best approach? For me, dividends play a critical role, especially if they’re paid monthly.
My background as an XAU/USD trader has shaped my perspective on currencies. The realization that fiat money lacks intrinsic backing has shifted my views. Now, when I consider stocks as assets, I prioritize those backed by tangible resources like real estate.
In my investment journey, I adhere to various principles, including the 48 Laws, the Ten Laws, and the Five Warren Buffett Laws. Among these, a fundamental tenet is to believe in the companies I invest in.
Interestingly, banks own a significant 90% of commercial real estate. This fact underscores the importance of understanding the dynamics of both financial markets and tangible assets. Moreover, it’s worth noting that governments often step in to bail out banks, which in turn support the commercial real estate market. This symbiotic relationship suggests that stocks tied to such assets are likely to be resilient, even during economic downturns.
Remember, investing is a journey, and each decision shapes our financial habitat. 🌱📈
Commercial real estateThe golden years are over, the market is going to be in for a reckoning somewhere some how.
Technical + bias on this play.
$VNQ POSSIBLE CRASH INCOMINGIn my opinion AMEX:VNQ will crash in couple of weeks. The scenario looks the same as 2008 crash or maybe even identical, MACD are same and patterns are the same!
VNQ / Real Estate at critical levelBuyers better start showing up in VNQ. Otherwise, we may see a big drop below. We're at critical support levels and historical trends are showing that buyers are not in favor. Something is going to give in the macroeconomy and my suspicion is the upcoming major debt rollover in Office and Multifamily is going to wreak havoc here.
My thoughts? Watch out below.
Real Estate Multi-Year DownsideCould happen, it’d be pretty crazy if it did. 2022 to now is a very clear 5 waves down, 3 up. At this point it could still pivot to the upside, but an over inflated market x rising interest rates.. I’m packin bear spray
DRV - 3x Short Real Estate ETF
Stop Loss: $40.50
Current Price: $47.72
First Take Profit: ~$80
VNQAMEX:VNQ
I think AMEX:VNQ can bounce here
Entry Zone: 81.9 - 81.5
SL 81.20
TP1 83.29
TP2 85.20
TP3 87.10
TP4 97.30 (Hold if it show strong trend)
NFA
VNQ Monthly ChartBack then:
VNQ falls below 20 SMA in Jul 2007
Double attempt to rebound (red arrows) but failed
after struggling 15 months, a sell off begin in Oct 2008
Now:
VNQ falls below 20 SMA in Jun 2022
Double attempt to rebound (red arrows) but failed
RSI remained in low levels below 50 (more bearish than bullish)
Might not seen the worst yet, unless RSI reverse back above 50
VNQ + some armature (at best) Elliot Wave. Upside coming?Assuming my Elliot Wave skills are somewhat on par here... I grabbed a candlestick bar pattern from the previous 5 wave, inverted it and matched up the pivots (which also happen to be a very clear head and shoulders patterns. If history rhymes here I'm thinking some VNQ upside is in the cards? Also note the Market Cipher B. red money flow wave is nearing completion and anchor waves are printed. Assuming we get 1 more pullback that could make for a really nice trigger wave to set it in motion. RSI's are gapped and pointing down which would usually indicate a swift and very temporary downward move
VNQ Seemingly Scheduled ReversalsVNQ appears to make a head & Shoulders, sometimes a complex head & shoulders every 56 days or so. Some are more clear on nearby timeframes. Typically these have been leading to a nice trend reversal, with further continuation after the measured target has been reached. Food for thought.
DRV buying opportunity comin up!Referencing VNQ to target a 3x short position as it provides a clearer picture of the sector than its leveraged counterpart (DRV).
As we cycle the 2022 interest rate increases this idea is supported fundamentally as well.
Real Estate Sector since 2005Markets don't necessarily repeat, but they do tend to 'rhyme'.
What do you think?
Vanguard Real Estate ETF ($VNQ) ShortThe Vanguard Real Estate ETF (VNQ) is an ETF that is based on the MSCI US IMI/Real Estate 25-50 index, a market-cap-weighted index of companies involved in the ownership and operation of real estate in the United States.
From its website, its objective is: to provide a high level of income and moderate long-term capital appreciation by tracking the performance of a benchmark index that measures the performance of publicly traded equity REITs and other real estate-related investments (investor.vanguard.com).
But with rising interest rates and "higher, for longer," is right now the time to be investing in Real Estate? The housing market is a significant contributor to the overall economy. When the market is strong, it can drive economic growth and create jobs in the construction, real estate, and related industries. Conversely, a weak housing market can lead to job losses and a slowdown in economic growth.
When interest rates rise, it can become more expensive to borrow money to buy a home. This can make it more difficult for people to afford the monthly mortgage payments, which can lead to a slowdown in the housing market.
Here are a few reasons why rising interest rates can make it a bad time to be in the housing market:
Higher monthly payments: Rising interest rates can increase the monthly mortgage payments for homebuyers, making it more difficult for them to afford the home they want. This can lead to a slowdown in home sales and lower home prices.
Decreased affordability: When interest rates rise, the overall cost of borrowing money increases. This can make it more difficult for first-time homebuyers to enter the market, and can also reduce the affordability of homes for low- and middle-income families.
Reduced demand: Higher interest rates can also reduce the demand for homes, as potential buyers may be discouraged by the higher monthly payments. This can lead to a slowdown in home sales and lower home prices.
Increased competition: Rising interest rates can also lead to increased competition among buyers. This is because buyers who have been waiting to purchase a home may rush to do so before interest rates rise even further. This can lead to bidding wars and higher home prices.
Overall, rising interest rates can make it more difficult for people to afford homes, reduce demand, and lead to a slowdown in the housing market. This is why it can be a bad time to be in the housing market when interest rates are rising.
Maybe that's why someone bought a large size position in VNQ 6/16 77 Puts 13,000x for $1.40
$VNQ: At a buy zone...This could be a substantial bottom in $VNQ here, worth monitoring at the very least. I have no position here, but tracking thee main ETFs and top 30 market cap stocks at all times, as well as my own watchlist for my long term account, and my screening tool output. Sentiment has been quite bad, and we had a rapid worsening of financial conditions for home buyers, akin to that of 1982, which is a very dramatic move, affordability wise. Let's see how this evolves, I'm thinking bond yields and mortgage rates will likely start to come down hard from here onwards as well, so naturally, Real Estate will breathe some fresh air.
Cheers,
Ivan Labrie.
