Financial Iceberg

FINANCIAL ICEBERG

Always consider hidden risks

TECHNICALS

The Situation

One of the worst defensive sector peformance since the beginning of the year have been the
Utilities Sector since January 18 2015 til June 26 2015.

Even the main technical indicators like the Ratio of the SP500 Utilities Index SPDR ( XLU ) and the iShares
US Treasury Bond ETF ( TLT ) compare to the Mighty SP500 Index are confirming the interest rates
sensitive sector as the Utilities are outperforming bonds since July 24 2015.But it started to change since
the 7 DMA turned upward on July 31 2015... Interesting to note that this ratio was on
December 29 at its highest since September 2008. (See 2nd chart below - blue line- 7 Day Moving Average)

And the Utilities Sector are outperforming also the Mighty SP500 since June 26 and
the 7 DMA did turn upward on July 6..It reached levels not seen on a relative basis
back to December 2002 on June 25 2105. (See Red Line - 3rd chart below).

The XLU reached on August 7 the highest level at 44.58 since the previous low made on June 26 at 41.31. XLU ETF is getting near testing the 200 DMA ( Day Moving Average ) now at 44.97. That will be the Ultimte Bull test for the Utilities Sector. ( See first chart below - Green line - ellipse ).

SP500 Utilities Index SPDR ( XLU ) is within an uptrend channel that started back on July 1 2105 with 42.68 as support and 44.71 as resistance. Also we have a support trendline at 43.50.
( See first chart below - Amber Trendline - Ellipses ).

But the most interesting factor is that it did break a Resistance Trendline on August 7 that started back on May 4 2015 at 44.21... Another constructive technical sign is the we had on July 31 the 20 DMA ( Day Moving Average ) getting above the 50 DMA. ( See first chart below - 20 DMA Yellow Line - 50 DMA Red Line ).

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SP500 Utilities Sector vs SPX: Outperforming SP500 ? $SPY, $XLU, $TLT #xlu #tlt #SP500

RATIO
SP500 Utilities Sector SPDR ( XLU )
Shares US Treasury Bond ETF ( TLT ) ( Blue Line )
7 DMA ( Red Line )
SP500 Utilities Sector ( XLU - Candles )

SP500 Utilities Sector vs SPX: Outperforming SP500 ?
August 10 ( From TradingView )

RATIO ( Blue Line ) 21 DMA ( Amber Line )
SP500 Utilities Sector SPDR ( XLU )
over
SP500 Index ( SPX )

SP500 Utilities Sector SPDR ( XLU )
Daily Price ( Candles )
20 DMA ( Yellow Line )
50 DMA ( Red Line )
200 DMA ( Green Line )

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