Monday, June 17, 2013

UTIL Utilities Weekly Chart Forecasting Tool Fibonacci Retracements

The utilities is a useful forecasting tool for markets. The closing price 15 weeks ago and the 50-week MA are two key parameters to watch and they are regularly updated on the Other Market Signals page. When the utilities are in a weekly uptrend, the markets are healthy and further upside is expected. The weekly trend is determined by comparing the weekly closing price to the weekly closing price 15 weeks prior. The chart shows the strong move higher week after week, confirming an ongoing weekly uptrend by continuing to print above the close 15 weeks prior. Now that price has fallen from the top, starting the last two weeks, there are initial indications of trouble ahead. Price is managing to remain a hair above the close 15 weeks ago, aside from intraday failures, but this week may prove challenging. The black circle show the close 15 weeks ago at 488.48. Bulls must close this week above this number to signal the all-clear for the broad indexes to rally higher. If UTIL stays under 488.48, there is trouble ahead for markets. The brown circle shows that the path becomes harder with next week requiring prints above 495.18. Thus, by Friday, 6/28/13, EOM, only 10 trading days away, UTIL must be over 495, otherwise, the markets will be in trouble. For this morning, with a large up move on tap for equities, watch UTIL 488.48 closely. If the utes sail above 488.48, then the market upside rally is real and has legs. If the rally at the opening bell occurs, but UTIL is unable to move above 488.48 today, that places into question the strength of any up move.

Part 1 of the forecasting tool is watching the 15-week uptrend as described above. Part 2 is when price crosses the 50-week MA which signals an increased market push in that direction. Sometimes the 50-week MA may cross first, followed by the 15-week trend number so the cross of the 15-week will add the extra oomph in that particular direction. For this week, UTIL is above the 50-week MA at 481.04 so bulls are happy, however, UTIL starts the week under the 15-week comparison number of 488.48 so bears are happy. Bulls win above 488.48 and bears win below 481.04. These two metrics are programmed into Keybot the Quant and are very important for markets.

The Fibonacci retracements are shown for the big rally from November through April. Note how price respects the retracements, tapping on the 62% Fib over both the last two weeks and now parked at the 50% Fib. The indicators are weak and bleak, except for the RSI that is attempting to recover, so this hints that lower prices should occur after a bounce. Watch UTIL 488.48 all week long since it will tell a lot about the overall market. 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.


  1. Boy, doesn't that jive nicely with your comments from the June outlook - that the week of the 24th has been down 20 of the last 22 times. If we continue to bounce now or after FOMC, I'd be selling those gains by 4 p.m. Friday.

  2. KS is Keybot looking to flip now that Util is above 488 and the S&P is above 1639?


  3. Alex,

    It might be imminently, but not yet. Tor its current status just click on the Keybot link on the left. Plus, KS will post changes in Keybot's status here.

  4. Yep, Keybot is on the long side again but do not be surprised for a whipsaw back to the short side. Markets are extremely erratic and unstable. The Dow is moving triple digits for five days in a row, the SPX is bouncing around in 30-handle intraday moves. Use UTIL 488.48 and GTX 4764 as the guides. Current prices are above so the bulls are in good shape. Keybot likely needs to see both the UTIL and GTX to fail to flip short again. UTIL is 488.70 only 22 cents above the danger line. Markets remain a crap shoot these days, up one day down the next with high point swings as volatility remains elevated and likely heading higher.


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