IYR was down on a day it should have gone up as did the market. There are only two reason why it didn't, that I can think of:
1) A prelude for what the market is going to do next week.
2) Treasuries tanked, which increased their yield, and therefore makes IYR's questionable dividend less appealing.
If number 2 is correct then it would explain IYR's insistent market rally the past few weeks and that the index is fairly valued currently, in regard to its risk/reward element, and will trade off treasury moves.
Of course, I would like to know why utilities don't move like that and why, in fact, they went up on Friday. Maybe they actually trade as an asset; instead of a piggybank for the rich. Or possibly they move in response to oil and natural gas prices...need to look into.
IYR yield is 8.92% (will it really pay out that much?), 15.19PE
XLU yield is 3.99% (more realistic), 11.57PE
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