Just before the Great Financial Crisis, the Housing Index peaked and quietly rolled over while the S&P 500 continued making new highs for two more years.
Today, we’re seeing a similar setup, with the Housing Index flashing another two year divergence as it breaks down from a bearish descending triangle to new multi-year lows.
With 30 year mortgage rates back above 7% and Consumer Discretionary making new 16-year lows relative to the S&P 500.
Consumer discretionary is currently the worst sector year-to-date (down 7-9%), the growing weakness across housing and consumer related areas is becoming a critical development to monitor.
**The** Takeaway**:** Housing is once again diverging from the broader market in a way that looks increasingly familiar.
Worth noting: October and November have historically been the strongest two months for stocks during midterm years.
