In August 2025 the Utilities Index initiated a head and shoulders pattern that has matured and this index is in the process of declining. In 2007 a similar pattern formed and resulted in a sharp drop going into October 2008. In addition to this the Transportation Index is repeating a pattern from 2021 to 2022. The Dow, S&P500, and NASDAQ have not initiated a decline that is similar to the Utilities or Transportation Index yet. Indicators, such as the Move Index, rising interest rates, Swiss Franc vs NASDAQ index, etc., show the stock markets should be in a decline. When a decline does occur, it could be swift, targeting a large number of stop loss orders.
Note that this information is for educational purposes only and not a recommendation.
Stock charts courtesy of StockCharts.com.
