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This is just a good example of a classic pattern in action. The tinted area below could be considered either a right triangle top or, my preference, a head and shoulders top. Archer Daniels Midland (ADM) is presently in a freefall; something about its CFO doing something naughty or something.
As you know, the stock market closed at lifetime highs on Friday. The Dow 30 Industrials? Never higher. The NASDAQ 100? Same. And the S&P 500 as well. The thing is, lifetime highs tend to beget new lifetime highs.
For nine months, I have been prattling on about the incredible diamond pattern on the Dow Jones Utilities ($UTIL). All I can say is that its performance has been pitch-perfect, and I am counting on this sucker to drag the entire financial world down with it, once they wake up.
Bombs away!
I remain madly in love with my Dow Utilities short (by way of XLU). Looking at the $UTIL itself, below, I think there’s a decent chance we will traverse the green zone. My wild-eyed fantasy, given the superb formation of the diamond, is tinted in teal. I doubt the government would allow the market to behave in such an appropriate manner, but…………hope springs eternal!
