Investors are piling back into energy along with other inflation trades. There's a large gap down to $90.50 area. Crude oil, shown here by USO, has also tumbled.
Trade is off if XLE makes a new high or USO/crude oil turns up. Press into a short position if crude breaks below $65.
Could also work as a pair trade for those bullish on oil, going long USO.
Utilities have risen along with a bond rally, stock market surge and AI-hype.
Stock market is back near peak valuation hit in late 2021, AI-hype is fading and surge in commodities is putting a lid on bonds.
XLU also firing exhaustion signals.
Despite already falling 50%, ANSS has merely reversed the blow-off top caused by the 2020 melt-up. The symmetric top is nearly complete. I expect a break will initiate a move to the March 2020 low around the $130s.
Catalyst will be the major indexes breaking to new lows, initiating the first capitulation selling wave of this bear market.
American Water Works broke uptrend from 2009 low, failed backtests of that now resistance, has a double-top and formed a head-and-shoulders topping pattern.
The target on a horizontal break is in the $50s, a greater than 50% loss.
Potential inverse H&S forming
Will complete at $220
Target off pattern is $250 area where there is prior consolidation range
17% return from current price
Assumptions: S&P 500 will rally at least 10% to around 4200, Nasdaq will outperform, semiconductors will outperform Nasdaq.
Trade is dependent on bear market rally. If not expecting continued rally, no...
