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David L. Singer

|davidlsinger@gmail.com| 516.830.1786

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IYR – iShares Dow Jones U.S. Real Estate

The Annotated IYR IYR -Weekly Chart

In previous issues I have highlighted the proposed head and shoulders bottom that in my opinion formed inthe S&P 500. This pattern is also very visible on the weekly chart of the IYR seen above. Here, the leftshoulder formed in mid-November, the head formed right at the March lows in the equity markets, and thesmaller right shoulder formed by late July. The pattern completed when the IYR broke over the neckline atapproximately $35. Given the completed pattern, the traditional measurement technique yields a pricetarget of around $50. Once again, the formula is Neckline minus Head plus Neckline, i.e., 35-20=15+35=50. The area around $50 is very interesting on the above chart for three reasons: (1) because$50.49 is the 50% retracement level of the total decline from the early 2007 top through the March 2009 price low; (2) because in September 2008, that was the level through which the IYR collapsed as it began awaterfall decline; and (3) The downward sloping trend line resistance comes through that area. Right now,the IYR is sitting on trend line support and is being supported by the 20 week MA as it consolidates. It hasmore than doubled since the March lows.

Annotated Charts and Commentary on The Financial Markets By David L. Singer | November 4, 2009 |

Volume 1 – Issue

3(a)