by Sam Collins 08/27/08
Dow Jones Utility Average (DJU) -- This widely-followed index, which is composed of 15 of the largest U.S. utility companies, broke its major bull market trend line in July 2007.
Since then, it double-topped late last year at 557 and is holding at a neckline at just under 460. The stochastic indicator is currently overbought and a break of the neckline would signal that a major move down was about to occur.
But this formation is not predictive until the DJU's neckline is broken and so watch this index for a possible future signal.
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FAST is now consolidating and recently flashed a buy signal from our internal indicator.
Options Expiration Adds Volatility
The opening looks to be higher but today is options expiration day, and anything could happen.
Chances are high stocks will sell off further, but be alert for a dead-cat bounce after such a dramatic breakdown.
Traders and longer-term investors should sell any new positions at the first opportunity and short ETFs on a temporary recovery in the market.
CAT, the blue-chip of its industry, is the first to attract attention when it's time to dress up a portfolio.
