FINANCIAL ICEBERG
Always consider hidden risks
TECHNICALS
The Situation

​​​One of the best defensive sector performance since the beginning of the year ​
​have been ​the ​​Utilities Sector as reach for yield is still on...

The XLU ETF reached on July 6 2016 the highest level ever at 53.02 as
​desperate investors looking for safety and reach for yield at the same time.​
​Closing price on August 4 was 51.47, a 2.9% lower than the high ever.
​ ​​(See first chart below - Ellipses).

The Utilities Index SPDR (XLU) broke on July 27 2016  the Support Trendline of an old Uptrend Channel that started back since May 19 2016. ​​(See first chart below - Blue Trendline - Ellipse). ​All that within a higher trading Volume for the XLU ETF. ​(See first chart below - Bottom Blue Line - Ellipse)

​​We are testing the Support Trendline of a Falling Wedge that Bulls need to protect at all costs.
​(See first chart below - Red Trendline - Ellipse)


And the Utilities Sector are under performing the Mighty SP500 ​​​(SPY ETF) (Ratio of XLU over SPY) since June 27 2016. ​Few of us realize that at a time XLU ETF is testing its Support Trendline price wise, it is also at ​​a Major Support Trendline on a relative basis (Ratio of XLU over SPY). (Second chart below - Grey Trendline - Ellipse).

But the most interesting factor is​​​​​​ that the interest rates sensitive assets are under performing lately the Mighty SP500 Index. And more surprising, the Utilities Index SPDR (XLU) are under performing long bonds (​iShares US Treasury Bond ETF (TLT)) since July 25 2016.  ​
(See third chart below - blue line).

And again, few of us realize that we are in the process of breaking ​​a Major Resistance Trendline on a relative basis (Ratio of XLU over TLT)  that started back since May 2007! (Third chart below - Red Trendline - Ellipse).

The chasing yield experiment is becoming a decisive battle for Bulls here as we are testing the Support Zone on the Utilities; do they continue to favor safer dividend yield or they go with higher beta sector like the Tecnology or even the Financials?




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Utilities Sector ETF XLU: At Support Zone?    $SPY, $XLU, $TLT #xlu #tlt #SP500

Daily RATIO ( Blue Line )
Utilities Sector SPDR ( XLU )​
​Shares US Treasury Bond ETF ( TLT ) 

Utilities Sector ETF XLU: At Support Zone?
​August 05 2016 ( From TradingView )​

Daily RATIO ( Blue Line )  21 DMA ( Amber Line )
Utilities Sector SPDR ( XLU )​
​over
SP500 Index ( SPY ETF )​
Utilities Sector SPDR ( XLU )​
Daily Price ( Candles )
20 DMA ( Yellow Line )​
50 DMA ( Red Line )
​200 DMA ( Green Line )
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