there has been speculation that Utilities are a safe play in a deflationary environment. I don’t know what the fundamentals say, but I do believe we are starting another wave down in the Utilities. After a very clear 5 waves down into the low of 2009, they have behaved much like everything and bounced rather nicely. One caveat … they didn’t make a new high as the rest of the indices were soaring. So, where do I “think” they are now …? If we neck down into a daily chart I am going to say the “bounce” from 2009 ended in April 2013 in/around 540. That’s either a BIG 2 or BIG B. Since then we carved a very “Ray Charles” count in 5 waves and just completed (today) the last leg of a triangle labeled a-b-c-d-e. If we take out the triple top at 512 then perhaps a little higher, a little change count and we can make it a-b-c. What am I trying to say … we have completed a CORRECTIVE PATTERN either HERE or a little higher and the utilities should start down in a potentially violent and large way.
the other thing I see is a FOLDBACK pattern that has folded back up the 2000-2002 meltdown. That puts us cresting at the top for another fall …patterns SUGGEST we foldback down to the left in a bear market for utilities.