Home Sweet Home:

The homebuilders are at a crossroads technically in my opinion. They are rate sensitive, therefore making them a decent barometer of their possible direction. On the WEEKLY chart below the ITB, this week moved decisively with a CLOSE above the 62.50 area in an ascending triangle formation. Next week will be crucial to demonstrate follow through as it inched above that level the week ending 8/12 up better than 4%, only to lose 4.4% the very next week and sink another 15% during the next 6 weeks. On its daily chart, it is trading right up into the bearish filled-in black candlestick, but I prefer the longer-term signals and as long as it remains above the WEEKLY 50-day SMA and round 60 number remain optimistic. Five of the last 7 weeks were below 60 intraweek and all 7 CLOSED above the figure (the other two came very close with intraweek lows of 60.28 and 60.16 so it is a solid level to play against). 

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