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The Three Dows

This is a syndicated repost published with the permission of Slope of Hope – Technical Tools for Traders. To view original, click here. Opinions herein are not those of the Wall Street Examiner or Lee Adler. Reposting does not imply endorsement. The information presented is for educational or entertainment purposes and is not individual investment advice.

I look at 37 ETF charts every day, and three of them are based on the largest and best-known Dow Jones indexes. Let’s take a quick look at all three.

The first, and best know is the DIA or “diamonds”. As of Thursday’s close (which is when I’m composing this post) this has been moving steady-Freddy, not even challenging its short-term trendline. You can see where the rounded top almost broke down (horizontal line), but all Powell had to do was pick up the phone.

In sorrier shape is the Transports (symbol IYT) has has stayed beneath its own topping pattern for many weeks and has been range-bound ever since. We need to slip below that red line in order to complete the “superset” pattern.

The third item in this freak show is the strongest, the Utilities (XLU). During more normal times, the XLU formed an absolutely gorgeous topping pattern which was a screaming sell signal for the entire market in early September 2008. These days, XLU is the cheerful beneficiary of the Fed’s shenanigans and interest-rate suppression, since the nearly 3% dividend XLU pays is a king’s ransom compared to the 0.03% your bank is happy to pay you.

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