Monday, August 04, 2008
Above is a chart of the XLU (weekly, 10 year). I noted in THIS POST on July 23, 2008 that I thought that utility stocks looked a little weak. At that time I initiated a small position in SDP which is the double short ETF for utilities.
If the chart looks odd to you, it is a Renko chart. As you can see there is a very distinctive (and symetrical) head and shoulder pattern. Helen Meisler who writes a technical analysis column on Real Money pointed this out today. You cannot know how thrilled I was that I was two weeks ahead of seeing anyone talk about this. I don't say that to sound boastful, but I've worked pretty hard to hone my skills. So to have some affirmation was, well, affirming.
The commodities are falling hard. I was expecting this fall in the spring. On May 28, in THIS POST, I commented on the Industrial Metals Chart. That chart showed a close of 450. It has since fallen to 430. I've found it useful to look at these indices charts because the media will report the information later rather than sooner. For me, it is a good way to keep my ear to the ground by keeping my eye on the chart.
I think that the commodities crashing will help the market overall. We cannot truly bottom until this group gets taken out.
I wrote a letter to Barron's--I'll let you know if it gets published.