Chart of the Week
posted 09/29/06 12:11 PM

It could be argued that the utilities are interest-sensitive and have become naturally allergic to the recent decline in the bond market. However, our Chart of the Week offers a different view. It reflects the Ratio between an index of inflation sensitive to deflation sensitive equities. This series looks very much as if it is about to complete a major head and shoulders top. Since the KST is in a negative mode the chances are that it will be completed. If so, the recent under performance of inflation sensitive equities, such as resource stocks will be confirmed. It does not mean that deflation sensitive issues will rise, merely that they will be likely to out perform their more volatile inflation sensitive counterparts.

Would you like the Chart of the Week on your site?  Please call 941-364-5850, or e-mail us at cow@pring.com so we can exchange the URL!

 Please note that our web site now contains two chart features (Charting the KST) that will allow users to plot the daily KST. This is useful for short-term trading. The second feature is the market cycle model. This one offers perspective from weekly data featuring the short-intermediate and long-term KSTs. All stocks can be plotted in this way along with a series of Indexes, a list of which is detailed on the site.  The charts are color coded to reflect primary bull and bear trends (weekly chart only) as reflected by the long-term KST but both shade the price bars  in green and red to reflect the short-term KST signals. You can access these at http://www.pring.com/KSTchart.htm .