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fib_1618

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Reply with quote  #1 
Quietly closed at new all time highs today.

Just for the record, this would not in any way, shape, or form, be consistent to a possible Dow Theory sell signal in which seems to be a hot topic of late. And even if we disregard the leadership of this interest rate sensitive sector in this same theory, under the guidelines laid out by Charles Dow over 125 years ago, there still hasn't been a sell signal of any degree at this time.

Fib

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bnick

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Reply with quote  #2 
Fib,

Does this development not scream "flight to safety", i.e., high yielding dividend-paying stocks as compared to treasuries?  I checked DP for this sector's history in the '00 to '02 bear market, and it indeed corrected nearly 50% in that time frame.  However, I question whether this sector was suffering from "pin action" from Enron in that same time frame.  I interpret this sector's recent performance as cash seeking increased return over treasuries.  At least, that's my fundamental understanding of what we're seeing in a technical sense.

I'd be very interested to see how the utilities performed in bear markets where treasury yields were low compared to utility yields.

Continued thanks for your thoughts.

bnick

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