The upturn in the market over the last few days was pretty much erased Tuesday in one fair swoop. As I mentioned in a previous article, the market seemed like it was setting up as a relief rally rather than a tradable bounce. Tuesday's action verified my suspicions and looks to be ready to take out the lows from last week.

When doing my screening, I try to locate strong stocks in strong industry groups or weak stocks in weak industry groups. The REIT industry has made a small bounce and is ready to probe to the downside.

REIT Industry

Kilroy Realty Corp. (KRC) is following the REIT Index's chart fairly closely. Notice that it has sold off since the beginning of October and made a small bounce. Also, the 50-day moving average is now acting as resistance. On Wednesday, I will be shorting if the low of Tuesday's range is violated. Again, make sure if filled to use the protective stops.

Kilroy Realty Corp

As a trader, I like to make the commentaries quick and to the point.  If you would like any more explanation on my observations, please feel free to contact me by e-mail.

Tom Incorvia is a swing trader with 18 years of experience in the financial markets.  E-mail him at tincorvia@gmail.com.