$DJU and $UTY are broken and ripe for another plunge while Tech is in rally mode...
So what I am learning about Utilities from this?
I am seeing the early signs that this sector indeed could lead the market, maybe a few months or few weeks ahead...
How?
One of the fundamental indicators I follow to spot major market tops are bonds relative to NDX.
At market tops, the most speculative segments of the major market , usually NDX, gets overbought relative to Bonds. This occurance has been a major top spotter that caused major institutional rotation from stocks to bonds hence created major tops. The recent strength in Tech finally is making bonds favorable once again.
What it has to do with utilities is that if Utilities should lead the market, then the recent plunge came very timely as bonds will get very attractive relative to stocks in about a month or less. So further weakness in Utilities and strength in NDX could be a confirmation that Utilities indeed lead the market.
I am learning about Utilities
Started by
A-ha
, Jan 10 2007 08:21 PM
2 replies to this topic
#2
dcengr
-
- Traders-Talk User
- 13,391 posts
Member
Posted 10 January 2007 - 08:30 PM
At today's rates, bonds are nowhere near attractive as they were in may 06...
Qui custodiet ipsos custodes?
#3
A-ha
-
- Traders-Talk User
- 5,875 posts
Member
Posted 10 January 2007 - 08:32 PM
At today's rates, bonds are nowhere near attractive as they were in may 06...
"nowhere near" is an emotional statement. Bonds relative to stocks in deed very attractive at this juncture. But they were more attractive in May. So I say a few weeks later, we shall see.
Edited by xD&Cox, 10 January 2007 - 08:39 PM.
