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US SECTOR SERIES FINALE 11/11: UTILITIES(XLU)+ESSENTIAL TA NOTES

AMEX:XLU   SELECT SECTOR SPDR TRUST AMEX UTILITIES SELECT INDEX
SERIES FINALE;Episode 11/11: US (SPX) Sectors Technical Analysis Series - 31st of July 2019 (4 Minute Read)

Since this is the Series Finale I will try to holistically summarize the whole series of 11 Episodes on all the US sectors.

The essential notes from this chart are the following(also included in the comments):

1. Compared to the previous expansion of 2002-2007; the current expansion of US Utilities has yielded a much slower growth. This can be seen from the chart as the current bullish channel is at the bottom range of the pitchfork . Despite this fact, the volume has kept growing continuously from which statement several indications can be derived. To keep it simple and as obviously as it can be, a good portion of the volume growth can be attributed to the funds flow from asset classes that are based on inflation (pension funds, real estate, fixed income securities etc etc) into equities characterised as defensive as part of XLU, XLP , XLV.

2. From the cycle lines it can be seen that we narrowly escaped a recession in 2015-2016. However, I do not think that this will be the case come by the next drop in the cycle circa-2021. Fundamentally, due to the low global growth that dominated the 2015-2016 correction particularly in the emerging markets-in effect due to President Trump the cycle extended. Despite my disagreement with his absurd trade and tax policies, I have to give credit where credit is due. Now at the same time, I do not think that a cycle extension is necessarily good; in a way it means that the fundamental & structural issues that develop in the economy during an expansion continue to build up even more. The higher it tops= the lower it will bottom(% wise).

3. Elections 2020, US/China trade deal and Brexit will dominate the negative momentum in the upcoming months and years. Global growth has slowed down quite a bit and it's way overdue for a recession. In fact, past June 2019, we have been in the longest expansion on record, lasting more than 10 years(122 months now).

Regarding the key takeaways from the XLU chart are all labelled above: structural supports, channel supports and bullish targets. I do not see a need to continually repeat myself. Make sure to check out the comments for detailed indicator analysis.

This episode concludes the show. Hope you enjoyed it- I certainly did.

This is just a brief "free" and very detailed analysis. Perhaps in the future I might form a premium group, to whose members I will provide all the details of my research. For any use of this show for references to any corporations or individuals that get inspired from my ideas, I'd appreciate it I am being given credit for my efforts.

>>I do not share my ideas for the likes or the views. This channel is only dedicated to well informed research and other noteworthy and interesting market stories.>>
However, if you'd like to support me and get informed in the greatest of details, every thumbs up or follow is greatly appreciated!

Step_Ahead_oftheMarket-

Make sure to check all the previous episodes on the US Sectors for more holistic understanding:

EPISODE 10: US COMMUNICATIONS ( XLC )
EPISODE 9: US REAL ESTATE ( XLRE )
Full Disclosure: This is just an opinion, you decide what to do with your own money. For any further references- contact me through any of my channels.
Jul 31
Comment:
XLU Quarterly. Bullish channel is supported by the momentum bounces from the Quarterly EMA 14(light green).

Quarterly MA 50 would be the initial long term support in case a recession occurs.
Jul 31
Comment:
XLU Quarterly RSI showing signs of a bearish upward slowing wedge.
Jul 31
Comment:
XLU Quarterly MACD seems quite healthy. Closing below the red"sellers" trend line 2 quarters in a row, would indicate a recession.
Jul 31
Comment:
XLU Monthly MACD. Closing above 2.62 would indicate a bullish breakout, likewise closing below 1, would indicate a bearish breakdown.
Jul 31
Comment:
XLU Monthly RSI. Out of all the previously analysed indicator, in my opinion this is the crucial one. RSI is in a diverging channel; Indicating a growing weakness from the buyers.

This is it folks. Hope you enjoyed it. Next up is a US industries analysis that comprise the sectors that I analysed in this series. But before I start with this project, think I deserve a break.

Happy trading, -Step_Ahead_oftheMarket-

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Comments

Great levels and short set up, i follow you for that.
+1 Reply
step_ahead_ofthemarket Bullandbeartrading
@Bullandbeartrading, About time you hit that bottom(just kiddin).

On a serious note; I am always doing my best man to present the full picture.
Reply
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