hisah wrote:What does the cartoon say? From the monthly chart (long term) HFCK still has a long way down to go! All time vol spike appeared in Dec 2015 between the 21 - 24 price level. Since then the price has nosedived! That's a nasty signal with all that heavy volume in action. Caution. 10.00 handle had better hold!
If it breaks that psychological multiyear support level the next level is 7.50 - 8.50 which if it fails to hold we have a sizable air pocket down to the next level at 2.50 - 3.00 (2001 all time low)!
By the time HF craters towards 3.00 the KE real estate will be in the junk yard with housing prices bleeding badly! That will be trigger a credit systemic event since the banks hold real estate in their books too.
Will HF trigger the peak in real estate?
HF price broke below the GFC price trough. In my interpretation of price movement that is a very bad sign coz in essence it is saying that current market conditions are worse than back then (allowing for irrationality of course). And that's quite a statement. Credit growth has also shrunk to GFC levels...excellent correlation.
All in all, HF is a highly cyclical stock - rallies hard during a bull and crashes badly in a bear with zero exceptions - it perfectly dovetails the market trend with minimal divergences here and there. Strong bear results in ridiculous HF pricing. I think HF is foreshadowing the overall market trend at this point in time.
Peak real estate + peak bonds = jaw dropping stuff. Real estate in KE is more or less in the plateau stage before a correction/bear begins. Ditto for bonds. If both happen at roughly the same time frame HF @2.5-3.00 will print. We will need a new word for discounts.
The main purpose of the stock market is to make fools of as many people as possible.