UTIL Weekly Chart Loses 424 Watch 50 Week MA

Based on the 15-week look-back technique for utilities, 424 is a critical number for UTIL all this week. If this level fails, which it did in the final minute today, this signals that the utilities have fallen into a weekly down trend, and typically the broad markets follow the utes lower.  Thus, the key item to watch after the opening bell on Tuesday is if price stays under 424. If not, and UTIL moves above 424, then the market bulls will be back in the market buying again. If UTIL stays under 424, the markets are in trouble and lower numbers for the indexes will continue.  

The utility technique is a two-step process, first the 15-week number fails, which occurred today, then second, you watch the 50 week MA.  Consider the 50 week MA to be a trap door for the markets that will signal waterfall selling for the indexes.  The 50 week MA is 417.91, call it 418. Thus, above 424, the market bulls wrestle back control and today's late day swoon is just a minor scare. Stay under 424 but above 418 and the markets will be trailing lower but the move will be orderly without extreme market failure. If the 418 trap door opens, the broad markets will collapse, typically within a half hour of the UTIL 50 week MA failing.

Note the large volume sell candles from March and August. March was an important low and since it occurred at such high volume, price had to come back down to test it again, which it finally did in August and the volume was even higher, thus, the market bears got game.  So price has to come back down to test the sub 415 area again and this is ominous since it is below the 50 week MA. So you have the road map for Tuesday, the utes will lead the broad markets, watch UTIL 424 and 418. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.