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Let's Get Into Housing Shorts

|Includes: BZH, ProShares UltraShort Real Estate ETF (SRS)

The Oxen Group, for Wednesday, is looking at a continued bearish market for a third straight day. With today's bullish economic data, investors still sold off stocks, pointing to a bear market that should continue as a bland day continues tomorrow. Most analysts think that Obama's financial regulation plans should not do much for the market. Futures are up, in after hours, but with this data, if a rally cannot be held, then there is no reason why we should expect a positive day at this time. The CPI will determine the day. One industry that really looks bearish tomorrow, however, is housing. The housing industry got a shot with, on the surface, bullish news. Instead, the housing market ended up with minimal gains or in the red across the board. Investors are not into the market with volume being light. Tomorrow, should continue a downward trend for housing sparked by a downgrade from Beazer Homes to ultra-junk status by the S&P that sent the stock down 10% in after hours. This is really a market that needs some very bullish jolt to get it going, and it until that happens this market is fundamentally bearish. With that said, Ultrashort Proshares Real Estate looks to be a strong play as an inverse to the housing industry, which should fall after its "run up" today. Technically, the ETF has been moving and is trending upwards with more buyers getting involved, yet it is not even overvalued on RSI and has reversed stochastics. That means a lot of buyers are still on the sidelines to short housing. Buy in early and watch the run!

Entry: Recommend buying within first 5 - 25 minutes.
Exit: We recommend exiting after a 2-4% increase.
Upper Resistance: 22.50

 

Disclosure: No positions.