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Richard's Remarks


I want to start with the D-J Utility Average. Historically, in bear markets the Utility Average tends to top out three to six months before the top. On that consideration, I'm bothered by the sudden and abrupt collapse of the Utility Average as seen below. The Utilities don't usually crash like this. It seems to me that this is violent bear market action. After all, the Utilities are supposed to be slow-moving defensive-type equities. Note that RSI shows oversold. So let's see what kind of a rally the Utilities can muster -- that is IF they can muster a rally.





Below, the Dow has broken down out of a wide head-and-shoulders pattern and also below its 50-day MA. So far, the Dow has halted its decline just above the July low of 12521. It would be bullish if the July low acts as support and is not violated.







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