Frankly, I never knew why REITs were soaring, and now I don't know why they are falling!
REITS are essentially an INCOME PLAY. They are economically sensitive, and they should respond well to inflation and a booming economy.
The recent plunge in REITS could mean that higher rates are coming, but that would be a disaster for MUNIs, and eventually for stocks in general.
Additionally, we have ABSOLUTELY NO EVIDENCE THAT THE FED IS PLANNING AN IMMINENT RATE HIKE!
Just the HUGE "carry trade" alone would give the FED reason to pause on any rate increase.
SO, LET'S SEE MORE OF A SELL OFF IN BONDS, AND MUNIS;
WHICH ARE TOTALLY "NON-ECONOMY" PLAYS; BEFORE WE WRITE OFF REITS TOO MUCH.
The current "income correction" was justified, just on the basis of valuation.
Indeed, who were these recent "plungers" into REITS anyway?
The gold/dollar relationship is also interesting.
If the dollar is going to collapse, because of recent "excess printing" by the FED; the bond market should "raise rates," which amazingly, will cause the dollar to soar!
CONSIDER;
SO, THE LOOSER THE FED GETS, THE HIGHER RATES GO, AND THE STRONGER THE DOLLAR BECOMES!
SO, PRINTING THE DOLLAR LIKE MAD ACTUALLY MAKES THE DOLLAR MORE VALUABLE! YIKES!
And then this: All other commodities are soaring, even as ONLY gold "sells off!" Is gold no longer a commodity? Well.......?
PERHAPS WHAT'S REALLY HAPPENING IS AN "INFLECTION POINT."
OR, IF YOU LIKE, A REVERSAL IN THE MARKET'S "POLARITY."
IN PERIODS OF POLARITY REVERSAL, THERE IS A PERIOD OF CHAOS AND UNCERTAINTY.
OR AS I SAY IT; ANYTHING CAN BE ANYWHERE AT ANYTIME.
SO EVERY PUNDIT IS ALWAYS, AT LEAST, A LITTLE BIT RIGHT!
Conclusion: This is not the time to put new money into the markets. The markets are extremely OVER-BOUGHT from the year long rally.
The economy and the markets clearly need a long rest from Mr G gross OVER-STIMULATION of late.
A VERY CHAOTIC CORRECTIVE PHASE IS COMING.....
BUT HARD ASSETS LIKE GOLD, GAS, REITS, STILL SEEM SAFE TO ME. INDEED, A BUYING OPPORTUNITY MAY DEVELOP IF THE SELL OFF CONTINUES!
SO, KEEP SELLING THOSE REITS! AND GOLD! AND GAS!
YEAH BABY, LIMBO LOWER NOW................
Postscript: I would also note that volume has been collapsing on rallies and sell offs. And, that could be meaningful later.
