Bearish Call On Home Builders ... What's Next For ITB?
by Mike Paulenoff
June 19, 2022 • 12:00 AM EDT
Last Wednesday, prior to the official FOMC rate hike of 75 bps, Mike Paulenoff warned MPTrader members about the likelihood of additional weakness in the beleaguered home builders, writing about the ITB (iShares US Home Construction ETF):
"In that, neither my pattern work nor my intermediate-term Momentum gauges offer much technical confidence that ITB will be able to carve out a meaningful corrective basing area in and around 53.00, I am expecting the price structure to head still lower to test the next key Fibonacci support plateau in and around 46.00."
Mike added, "The fact that the Fed intends to maintain its rate hike cycle through Q3, 2022 at a minimum (unless today's FOMC policy statement and Powell press conference change the timeline), and given the sharp back-up in mortgage rates, the crash in demand for mortgages, the slowdown in economic growth (recession?), and residual upward pressure on prices in general, and housing in particular, the prospects for a powerful, sustained upside reversal in ITB appears low-to-none."
ITB, which was trading at 53.18 at the time, proceeded to nosedive into Friday's late-session 11-month corrective low at 48.02, a down-move of 9.7%, bearing down on Mike's next lower key technical level at 45.80-4600, which represents the Fibonacci 62% support plateau of the entire post-March 2020 Pandemic bull phase.
The ability of ITB to contain further weakness in and around 46.00 will provide Mike with valuable technical and macro market information about the underlying strength or weakness of the housing sector, the consumer, and the outlook for mortgages (longer-term interest rates). Mike's work argues that ITB buyers need to emerge to imbue an otherwise dismal and still-deteriorating intermediate-term technical setup with an initial measure of confidence to avert triggering the potential for a "death spiral" in the housing and home building sectors.
Join Mike and MPTrader members next week as they monitor, chart, and discuss the ITB as well as many individual names, ETFs, macro indices, commodities, Bitcoin, and Precious Metals miners in real-time as they brain-storm hour-to-hour navigation of the current challenging trader and investor environment.
Thirty minutes after the opening bell on November 24, 2025, I posted the following heads-up to MPTrader members about the technical setup in META:META has the right technical look of a significant U-Turn to the upside after completing a 27% August-November correction from 796.25 (8/15/25) to 580.32 (11/21/25)... To gain more powerful upside traction, META needs to climb and sustain above nearest-term resistance at 614.70 to 616.50, which if (when) taken out, will open a higher price pathway to the 670 area to challenge the down-sloping 200 DMA... Last is 609.27...
Last Friday morning, to calm frazzled nerves amid a 1% pre-market plunge that was threatening to complete a 100% give back of the prior week's 3.
Late on Friday, fellow MPTrader member MarkinQueens exclaimed: Mike's XOM (Exxon Mobil) chart from August is working! Last $117.26!Back on August 25th, this is what we discussed about Crude Oil and XOM:Just in case anyone is wondering what the chart of nearby Crude Oil is looking like as we approach the "official" end of summer.
On August 12, 2025, this was my response to an inquiry from an MPTrader member about intense weakness impacting SMR (NuScale Power Corp):SMR (NuScale Power)-- Fellow member Irv66 asked for an update on this modular nuclear reactor manufacturer that blasted-off from 11.08 in early April to 53.50 at the end of July (+382%), but has since been in the grasp of a major correction from 53.50 to 38.33 (-28.6%). My pattern work argues that SMR is nearing key support from 37.50 down to 33.
ARKK (ARK Innovation Fund, ETF)-- Back on August 20, 2025, this is what we discussed about ARKK:Fellow member Pawel has requested an update on Cathie Wood's fund, which in June thrust up and out of a 3-1/2 year base-accumulation period and pattern above 68.40/50 that subsequently climbed to my initial target in the vicinity of 80 (see my attached Daily Chart). Since the 7/21/25 high at 79.
