Utilities Divergence

By -

I’m noticing an interesting divergence happening between the Dow Utilities and the equity markets in general. Utilities have been quite weak lately, and in the past, such spreads have resolved themselves. In the chart below, the black line graph is the Dow Utilities Index and the blue line graph is the S&P 500 index.


Although XLU, at first glance, seems badly oversold, I would humbly point out that its long-term trendline from the March 2009 bottom has, for the first time, been penetrated.