LEN (Short)

I just read last night that 13% of all US homes are vacant. We've seen plenty of indications that housing is entering a or rather has been in a double dip recession. In the Challenger report this morning, there were heavy job losses, I believe the heaviest, in the construction industry. LEN has also shown less then ZERO relative strength. At this point a dead cat bounce would be most welcome in LEN and I think it's likely.

 The daily chart shows a bearish ascending wedge, the typical lateral/top formation after a wedge, a failure in MACD and this is a long version (26/52/9) as well as very poor relative strength the last 3 days on huge volume, which could set up a dead cat bounce on an oversold condition. It also broke the last bit of support today.

 The daily 3C chart has tracked all the major moves accurately and is quite negative right now in a leading neg. divergence.

 The 15 min chart for 3C, TSV and MoneyStream all agree with TSV/MS in leading negative divergences. Also note the volume in that little red box.

 Looking at the daily chart alone, a dead cat bounce looks likely, the 3C 1 min chart seems to confirm that.

Here's a potential stop as the 2 day Trend channel has tracked LEN very well. ADX also has turned down from above 40 signaling the end of the uptrend. This is the kind of environment when you want to use any strength for a tactical entry. Oh, and because the TC stop is near $20, please do not use $20 being an even number.