Cycle Trading: Real Estate Update
|Back in December we discussed how it appeared the the Real Estate ETF REZ was printing a not only a daily cycle low, but its intermediate and yearly cycle low as well. Last week REZ confirmed its intermediate cycle low.
REZ printed its lowest point on week 34, placing it late in its timing band for an ICL. A weekly swing low formed in December to signal a new intermediate cycle. Last week REX closed convincing close above both the declining weekly trend line and the 10 week MA to confirm the new intermediate cycle.
It also appears that the yearly cycle low formed as well. REZ formed its last YCL in December, 2018 off of support from the 50 week MA. The week 34 low also formed off of support from the 50 week MA. REZ then went on to close above the upper weekly cycle band last week. Closing above the upper weekly cycle band begins a new weekly uptrend and also signals that the YCL has been set.
REZ's daily cycle has averaged 32 days over the past year. Since this is the first daly cycle of a new intermediate cycle, this should form as a right translated daily cycle. With Friday being only day 20, REZ could trend higher for the next 2 weeks before seeking out its DCL. Long positions could be entered/added to here, using the 10 day MA as the stop. Or wait on the next daily cycle low which should print sometime over the next 2 to 3 weeks.
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