HANS Earnings & $UTIL Breakdown

First off, looks like I blew the HANS short recommendation. This company came out with stellar earnings this morning, and pre-market bidding looks like it'll open at a new lifetime high. Ah, well; can't win 'em all, folks. The key is that we had a stop in place, we take the loss, and we move on. With a stock like this, it's hard to know if it'll ever stop rising!

In retrospect, the problem with my analysis on HANS was the lack of analysis. This chart was not in any particular technical formation per se. I made the worst of errors of charting - projecting what I thought might happen based on a very small set of supporting data (in this instance, what looked like a double top). So, again, this was not a real pattern at all (such as a wedge or a saucer). So I'm disappointed in myself in being so hasty; that was a lousy analysis and a lousy recommendation.

Let's look at something which does have a good pattern and is probably more important to the market in general - the Dow Utilities. As you can see from the graph below, there are two very bearish situations with this chart. First, the very large ascending trendline going back over three years was broken a number of weeks ago. Second, there is a very plain head & shoulders pattern which I've highlighted here for you. So we've got a bit of a one-two punch.


The likely subsequent drop in this market would portend even higher interest rates as well as additional weakness in the market overall.