Real estate sector subdued by news, ready to roll over for another move down

Sobering "news" about housing starts and building permits supposedly helped take down the markets today. Now, anyone who knows anything about the housing market is aware that activity picks up in the late spring and summer, then slows again into late fall and winter. And anyone who understands the pace of the housing market and is aware of what's going on, realizes the slowdown is going to last a really, really, really long time. Is all that priced in already? I'm convinced it isn't priced into home prices yet. What about in tradable markets like $HGX or the IYR exchange-traded fund (ETF)? I've been considering the 50% retracement I've marked on the IYR weekly chart, below, as a B wave level, after it broke over the downtrend channel lines to make a serious B wave - meaning, now ready to continue lower again in a C wave (a 5-wave movement in EW terms). You can see in the IYR daily chart (top chart below) that it was already faltering before today's "news".

At the bottom I've borrowed Tony Caldaro's Objective Elliott Wave chart of the housing index $HGX (from page 3 of his public charts available from his site - link above, and always at the right side of the page here - thanks again Tony!). I see that Tony's marking that as having finished an X wave. In the EW that I know, that implies Tony is expecting a 3-wave ABC movement down, and I'd expect that to dig to a new low, same as the C wave I've been expecting, would do. Bottom line? Look for a trend change to play out leading real estate to lower levels (and don't be surprised if it drags other sectors down too).

This bearish view will be wrong (and stops should be exercised to stop put of shorts) if it strengthens again, and makes new swing highs. Assuming the bearish view holds, it can be played with SRS or whatever a trader prefers, looking for continuation moves lower.