Intermarket Analysis Throught Macro and Technical Methods

Technical Set Up: Shorting American Real State

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Technical Set Up

P&F is a tool that removes time from the equation, allowing us to focus solely on price. It has been on the rise since October 2023. Key tool in a Technical Set Up

Vehicle

Direxion Daily Real Estate Bear 3X Shares You can see the composition and objective of the ETF here: DRV ETF Summary

A few notes before presenting:

This is extremely aggressive and therefore extremely risky.
It’s very expensive to maintain over time.
Position sizing must be done carefully.
It must be consistent with your investment horizon.

Once we switch to candlestick charting, which includes time, we can see the asset from another perspective. The speed changes and volatility increases, an unequivocal sign of indecision. An uptrend is confirmed with four tests in the monthly time frame.

Weekly Time frame-Decision Time frame for us.

Breaking down the time into weekly frequency and observing only the closes, we see a completely channeled asset. The battle zones, value zones and breakout points are super clear. This is very important for us. We know where we’ve lost. This is key. It determines the position size, given the asset’s volatility. Remember, DRV x 3. Another important dimension is analyzing the market’s stance. It’s very concentrated. The paths of least resistance are longer paths.

Value zones are by definition, war zones.

Returning to P&F, we see the compression and a clear support zone

Zoooooooming

Negatively correlated with the S&P 500. This is crucial for us. It's exactly what we need.

Shooting

This is where styles come into play. There are two ways to trade this. Both have their pros and cons.

Very important. What we show here are our analyses. We present them for our own marketing purposes. These are not trade recommendations.

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