We're still pessimistic about insurance and real estate. We could have easily added some financial industries to the mix and still might, but they're such a mess right now they deserve their very own look by themselves.

Insurance

We went bearish on the insurers back on September 7, then retracted our call on October 23. Now, having seen today's action, we have to think there's more downside in store.

On our chart of the Dow Jones Life Insurance Index (DJUSIL) indicates another slide under the 200-day moving average line (blue). Only this time, the 100-day line (black) came with it. Plus, we have a new bearish MACD cross. This points to a much bigger bearish problem than just a small correction. Let's use August's low of 622 as a target, though a close above the 100-day line will negate the bearish call.

Dow Jones Life Insurance Index (DJUSIL) - Weekly


The Dow Jones Property/Casualty Insurer Index (DJUSIP) is having a slightly better day so far, but still appears to be struggling overall. It actually hit new multi-year lows when it reached 336.08 last week. Even though it's above that mark now, each effort to recover has been met with even stronger selling.

There is a potential problem here with a bearish stance though -- the Fibonacci retracement line right at 335.60, pretty much last week's low. If the bulls were going to make a stand, this is pretty much where it should be. So, it may be wise to wait for a move under that key level before getting too pessimistic on this group.

Dow Jones Property/Casualty Insurer Index (DJUSIP) - Weekly


Real Estate

A strong August and September weren't enough heal the wounds - the Dow Jones Real Estate Index (DJUSRE) has fallen to new lows. In fact, it almost looks a little head-and-shoulderish. A close under last week's multi-year low 255.15 would clinch the bearish call.

As for where this one may end up falling to, it's anybody's guess. There's really no good frame of reference or prior support level that means much. The only line in the sane we're worried about is out stop on this bearish view. Let's use the 100-day line -- currently at 286 -- as the stop.

Dow Jones Real Estate Index (DJUSRE) - Weekly


Water Going Down The Drain?

Despite the fact that we think the group has enormous long-term potential, close followers of the Sector Spotlight may have already noticed how all the major water indices are now back under their 200-day moving average lines. Since that was our proverbial line in the sand, our official bullish stance was cancelled when it happened. You can also see a major support line was broken for the Dow Jones Water Index (DJUSWU).

At this time we have no plans to issue a renewed bullish stance, though the sector will absolutely remain on our radar. It tends to be the kind of industry that runs hot and cold (no pun intended), but when it's hot you definitely want in. We'll keep you abreast.

Dow Jones Water Index (DJUSWU) - Weekly


Price Headley is the founder and chief analyst of BigTrends.com.