What Next Week’s Fed Meeting Means for Real Estate

[Trading With Larry Benedict]( What Next Week’s Fed Meeting Means for Real Estate By Larry Benedict, editor, Trading With Larry Benedict The Fed’s interest rate raises had sent the iShares U.S. Real Estate ETF (IYR) into a near two-year downturn. As a reminder, the ETF holds a diverse range of commercial property REITs (including industrial, retail, data centers, and healthcare). So when the Fed pivoted to future rate cuts last October, IYR saw a short, sharp rally. It gained 27% in only six weeks. That was a big move for this sector. Then, after peaking in mid-December, IYR’s fortunes changed again. It began drifting lower with a sell-down that accelerated earlier this month. Yet it has recently bounced. So today, I want to check IYR’s prospects from here… Recommended Link [Elon’s New A.I. Device is About to Shock the World]( [image]( Using this device you see above… Elon Musk just tested a new type of A.I. that according to Wired Magazine will usher in… “The next step in human evolution.” [Click here to see the details because a lot of people could get rich from this new invention.]( -- Gathering Momentum On the left half of the chart below, you can see the tail end of IYR’s near two-year downtrend. It had topped out in late December 2021 at $116.89. And it didn’t bottom out until last October at $72.88. That was an almost 38% fall. iShares U.S. Real Estate ETF (IYR) Source: e-Signal [(Click here to expand image)]( The last leg of IYR’s downtrend (after its countertrend rally in July) coincided with the Relative Strength Index (RSI) crossing right across its channel from overbought to oversold territory. Also, the 10-day Moving Average (MA, red line) fell below the 50-day MA (blue line), dragging both MAs lower. Then a converging pattern between the IYR stock price and the RSI (orange lines) stopped IYR’s fall and set it up for a bounce in October. This upswing gathered momentum as the RSI bullishly broke up through resistance (green line) and into the upper half of its band. Likewise, the blue MACD line crossed above the orange Signal line and rose well into its upper range. Yet after hitting its peak on December 14 (‘A’), IYR’s rally stalled… Take another look: iShares U.S. Real Estate ETF (IYR) Source: e-Signal [(Click here to expand image)]( The MACD rolled over and fell. The countertrend rally that began in February also topped out in March at a lower high (‘B’). The 50-day MA began tracking lower as the 10-day MA plunged earlier this month. The severity of that down move resulted from economic data suggesting rate cuts could be further away. Yet the fall also pushed the RSI into oversold territory, setting it up for a bounce. IYR rallied as the RSI tracked higher from oversold territory. That’s a potentially promising move. But for now, both the RSI and MACD are still in their lower bands. So what should we look for next? Free Trading Resources Have you checked out Larry's free trading resources on his website? It contains a full trading glossary to help kickstart your trading career – at zero cost to you. Just [click here]( to check it out. Testing Resistance It’s still early days with this move… The real test will come when the RSI retests resistance (red circle). The RSI needs to break through this for IYR’s rally to continue. If the RSI remains stuck in its lower band, this current up move will become another countertrend rally in a longer-term downtrend. Another clue also lies with the MACD. Recently, the MACD line has trended higher and is converging with the Signal line. If the MACD line can cross above the Signal line and keep tracking higher, then IYR’s bounce could have further to go. Regards, Larry Benedict Editor, Trading With Larry Benedict [The Opportunistic Trader]( The Opportunistic Trader 55 NE 5th Avenue, Delray Beach, FL 33483 [www.opportunistictrader.com]( To ensure our emails continue reaching your inbox, please [add our email address]( to your address book. This editorial email containing advertisements was sent to {EMAIL} because you subscribed to this service. To stop receiving these emails, click [here](. The Opportunistic Trader welcomes your feedback and questions. But please note: The law prohibits us from giving personalized advice. To contact Customer Service, call toll free Domestic/International: 1-888-208-6550, Mon–Fri, 9am–5pm ET, or email us [here](mailto:feedback@opportunistictrader.com). © 2024 Omnia Research, LLC. All rights reserved. Any reproduction, copying, or redistribution of our content, in whole or in part, is prohibited without written permission from Omnia Research, LLC. [Privacy Policy]( | [Terms of Use](