Weak Defense

June 24th, 2011
in contributors

hard hats  Guest Author:  Chris Kimble  (See About the Author end of article.)

Note:  This is a cross post with Advisor Perspectives dshort.com

Often investors and investment professionals use so-called "Defensive Sectors" to help reduce downside risk to an overall portfolio. This idea helped for a good while back in 2008, yet once these Defensive ETF's started breaking support, they fell a ton along with the broad market.

Follow up:

The chart below is a 3-pack reflecting three so-called Defensive ETFs: Consumer Staples, Healthcare and Utilities.

As of the past couple of days, the Utilities ETF/XLU has broken key support, with Staples and Health care pushing support to an extreme. If investors/professionals are using these ETFs, a big caution sign will go up if support is taken out, not only towards these three, but the broad market as well. Remember, once the defensive plays started to breakdown in 2008, major weakness was seen across the board.

What happened in 2008 that could be happening right now? Something that could trigger the defensive issues to fall? Put your hard hat, because the U.S. Dollar is creating a series of higher lows!

Click to View
Click for a larger image

Related Articles

Weighing the Week Ahead:  Has Stock Selling Gone too Far?  by Jeff Miller

The Double/Triple Doji:  Have We Been Warned?  by William Kurtz

Weighing the Week Ahead:  An Economic Tipping Point?  by Jeff Miller

Stock market Cycle Analysis  by Erik McCurdy

Consensus:  Groundhog Decade for Stocks  by Ed Easterling

Call-Put Ratio Approaches an Extreme Low  by Macrotides

About the Author

For the most up-to-date Kimble analysis, check out Chris's blog:   Kimble Charting Solutions

Make a Comment

Econintersect wants your comments, data and opinion on the articles posted.  As the internet is a "war zone" of trolls, hackers and spammers - Econintersect must balance its defences against ease of commenting.  We have joined with Livefyre to manage our comment streams.

To comment, just click the "Sign In" button at the top-left corner of the comment box below. You can create a commenting account using your favorite social network such as Twitter, Facebook, Google+, LinkedIn or Open ID - or open a Livefyre account using your email address.

 navigate econintersect.com


Analysis Blog
News Blog
Investing Blog
Opinion Blog
Precious Metals Blog
Markets Blog
Video of the Day


Asia / Pacific
Middle East / Africa
USA Government

RSS Feeds / Social Media

Combined Econintersect Feed

Free Newsletter

Marketplace - Books & More

Economic Forecast

Content Contribution



  Top Economics Site

Investing.com Contributor TalkMarkets Contributor Finance Blogs Free PageRank Checker Active Search Results Google+

This Web Page by Steven Hansen ---- Copyright 2010 - 2016 Econintersect LLC - all rights reserved