Utilities… they’re not your father’s Oldsmobile

DJIA: 44,131

Utilities… they’re not your father’s Oldsmobile. In fact, these days they’re almost Techy, thanks to AI’s demand for power. But you don’t have to go to those names like Constellation Energy (CEG – 345) and Vistra Corp. (VST – 208), just the chart of the SPDR Utility ETF (XLU – 86) looks more Tech than most Tech. After a two-month training range, XLU broke out just recently, and since it has been in a short-term consolidation, what we use to call a flag pattern. These patterns almost invariably resolve to the upside.

Good markets have their way of ignoring bad news. In turn, good markets embrace any good news. This market did not exactly ignore Powell’s suggestion he might not cut in September, though that paled in comparison to the good news from the M&M boys. Then, too, stay tune for the reaction to Apple (AAPL – 208) and Google (GOOG – 193). Thursday’s reaction was not good and that’s not good, but it’s one day. Let’s see what tomorrow brings for Apple and Amazon (AMZM – 234). Whether corporate or economic it is never about the news, it’s the market’s reaction to the news. The A/D index recently made a new high, not the backdrop against which stocks get into a lot of trouble. That said, the new highs in the S&P and the Nasdaq don’t tell the whole story. NYSE stocks above their 200-day have stayed around the mid 50‘s, meaning little more than half are in uptrends.  Against that backdrop, it’s more than just catchy that most days most stocks go up.

Frank D. Gretz

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