Research Excerpts

Stock Market Correction Over? Watch Utilities.

Posted on: Tuesday, February 4th, 2014

The following (green highlights) is one of the 12 charts and the accompanying analysis/commentary that were featured in Monday’s (February 3rd) Keys To This Week report.

Keys To This Week is a detailed weekly outline of key market factors and corresponding charts pertaining to the US stock market and market sectors, US interest rates, and the US Dollar, that are most likely to influence US financial market direction during the upcoming week.  It includes a comprehensive list of market metrics including intermarket relationships, investor sentiment, seasonality, relative performance, investor asset flows, market breadth, and price patterns and trends to formulate a forward-looking analysis of the US financial landscape.

Excerpt From: Keys To This Week
Asset Class:
US Stock Market Sectors
Topic: The Utilities Sector
Date: February 3rd, 2014

The green ellipse in the lower right edge of Chart 9 below, one of our new sector-related metrics, shows that the daily percentage of the sector pie that Utilities comprises has increased to 6.7% as of Friday from just 5.3% on January 3rd, which lifts it above its 63-day (quarterly) quarterly moving average for the first time since May 2013. 

Chart 9

Chart 9

The green vertical highlight between both panels show that the Mar 28th through May 2nd 2013 period was the most recent instance that the percentage of assets invested in Utilities rose above its quarterly moving average, and that this coincided with the most recent period of relative sector outperformance. Accordingly, as long as the percentage of sector bet-related assets continues to expand, recent relative sector outperformance will be expected to continue.


We are particularly interested in the Utilities Sector right now because of its correlation to both long term US interest rates and the US stock market.

Asbury Research subscribers can view the entire 12-chart report by Clicking Here.