Selling Climax Near?
The market has seen some wild moves in a plethora of instruments. This is normally indicative of a top, as we have seen explosive gyrations in the dollar, Bitcoin, and Vix among others. These types of events do create opportunity however with smart entry points. As everyone zigs with TSLA and AMZN inside the strong overall discretionary space let us zag by taking a look at the homebuilders. Of course, they are interest rate sensitive with the Fed meeting Wednesday, and after hours last night, LEN disappointed with earnings. This is the number 2 holding in the ITB at 11% of the fund, and below is the daily chart which could create a long chance for patient investors. Wednesday the ETF plunged 4.1%, its second-largest loss of 2024 (fell 4.8% on 1/23) and it could trade toward the very round par number which is right in my wheelhouse. Additionally, that would be a gap fill from early this summer. I would prefer to see a positive catalyst with a bullish candlestick Thursday, as catching falling knives is a dangerous endeavor. At 102 I think this is a good risk/reward scenario.