Real Estate and Financials: Sell the Rally

I have to admit that I wasn’t expecting the real estate and financial sectors to hold up as well as they have over the past few months.<!--more--> My ultra-short positions (UltraShort Real Estate ProShares (SRS) and UltraShort Financials ProShares (SKF)) have taken a beating, and readers have been emailing and asking what gives. How can these sectors be stabilizing and advancing amidst the flurry of bad news? Here is a quote from an Associated Press article detailing the phenomenon:

Housing stocks rose across the board Thursday, defying a bevy of industry and corporate data that showed the housing market continued to erode in the first part of the year.