Part of my idea this week of watching the "high risk" assets included the REITS. My history with them to date this year has been multiple bearish strikes with no better than 50/50 success. The hype surrounding the commercial real estate market points to it as being the "next shoe to drop," however, price action in many of these names this week looks to me like it supports a totally different outcome.

Start with the ETFs. There are a tremendous number of ETFs that track the vast components that track "Real Estate." The one I track most often, and use as a vehicle to trade options, is the IYR. It's a little early to call this, but thus far, one cannot rule out the possibility of a rounded bottom taking shape, or perhaps a cup and handle developing over the coming weeks.

There isn't much in that chart that is spectacular, but I like the way it is shaping up. If you follow most of the other Real Estate tracking ETFs, you'll notice a lot of volume being pumped into them over the last two sessions (FRI, REZ, RWX, RTL, WPS, DRW). They might be relatively illiquid, but there is a theme going on there.

When dialing down to individual stocks, you can break down the REITS up into several different catagories: Diversified, Hotel, Healthcare Facilities, Industrial, Office, Resedential, and Retail.

Looking through many of the companies listed under the links below, you'll see strong upward price moves in the last 2 sessions, accompanied with good levels of volume. Today's movement was most important though, since these stocks are so correlated to the financial sector. Even despite today's early weakness in financials, the REITS were ripping.

I've broken down this group into a group of select favorites. For the most part, I have found those with the best technical strength, I have pulled out those that have already confirmed a comparable pattern to the IYR, or those that have already broken out, or are the closest to doing so. Here is my list of favorites: HCP, HCN, PLD, YSI, KRC, EQR, SPG, TCO. Most of these show cup and handle patterns pending confirmation.

You might also check out the URE, as a cheap way to play this move.

Be well,

OA