Today, we are going to present Elliott Wave Analysis of the Real Estate sector and see how it's been performing in comparison with rest of the World Indices. We can hardly spot any differences as we think Real Estate sector is following the same cycles as Dow & SPX. There was a Real estate peak in 2007 that we have labelled as (w). It was the time when everyone was very enthusiastic about investing in the real estate market for the fear of getting left out of the move. However, no one paid attention to the fact that market was in a technical area from where a decent pull back could take place. It was the 123.6 - 161.8 ext of ((W))-((X)) starting from red x low (May 2004). Real Estate did turn lower as the Elliott Wave analysis would have suggested, it was a steep decline but once again buyers appeared where they should have appeared. Just around 123.6 ext of red w-x. Index then started a rally creating a Real Estate bottom in 2009 (to be confirmed on a break above 2007 peak).
There would be pull backs but best of reading of the Elliott Wave cycles suggest, there shouldn't be a significant pull back happening until the real Estate Index has not hit 342.50 - 380.78 inflection area which is 100 - 123.6% extension of ((W))-((X)) up from 2009 low. We think this area would end the cycle from 2009 low or at least from 2011 low resulting in a larger 3 wave pull back in the Index which should find buyers again as the trend remains to the upside which is the trend for the human race as well (growing & getting better). It should be noted this is not an investment advice.
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