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Financial Strength and Utility Weakness

|Includes:American Electric Power Company Inc (AEP), CMA, DUK, HCBK, KRE, TLT

Technical Action Yesterday

Technical action by S&P 500 stocks was bullish again yesterday. Eleven S&P 500 stocks broke resistance (Akamai, Corning, Lincoln National, Ameriprise Financial, Comerica, Hudson City Bancorp, MetLife, PNC Financial, SAIC Inc. Unum Group and Wells Fargo) and three stocks broke support (Duke Energy, Scana Corp. and American Electric Power). The Up/Down ratio increased from 5.41 to (382/70=) 5.46.

Technical action by TSX Composite stocks once again was mixed. Four TSX stocks broke resistance (Major Drilling, Rona, Savanna Energy and Transcontinental) and four stocks broke support (Manitoba Telecom, Sears Canada, Fairfax Financial, Shoppers Drug). The Up/Down ratio increased from 4.09 to (144/35=) 4.11.

Interesting Charts

S&P 500 stocks breaking resistance were dominated by financial service stocks, most notably regional bank stocks (e.g. Hudson City Bancorp, Comerica). The Regional Banking SPDR broke resistance to reach a five month high.

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The long term Treasury ETF prices continued under significant pressure. Mixed success of the 10 year auction completed yesterday added to weakness. Traders will watch the 30 year auction today very closely.

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Interest sensitive equities are starting to respond to higher Treasury yields. Notable on the list of stocks breaking support yesterday were utility stocks (e.g. Duke Energy, American Electric Power)

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Stocks: AEP, DUK, TLT, CMA, HCBK, KRE