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What sector had a major impact on the economy and stock market from 2006 to 2009? The Home Construction Index, which fell 90% in price in a few years. What sector has been very hot of late and might have helped pull the broad markets higher? The Home Construction ETF (ITB) is up 3 times what the S&P 500 is up over the past 2 years.
So Goes Home Construction, So Goes the broad market? I doubt it's a simple as that! Most of us are well aware that Real Estate/Home Construction is an important part of the economy.
The DJ Home Construction index's rally over the past two years has it dealing with its 38% Fibonacci resistance level at the top of a rising wedge. The Power of the Pattern shows us that about two-thirds of the time a large wedge like this leads to lower prices. Will it be different this time?
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