Friday, January 3, 2014

UTIL Weekly Chart Sideways Symmetrical Triangle

Utilities are about to make a major decision that will greatly influence the broad market. Price must decide to break upwards, or collapse downwards, out of the sideways symmetrical triangle. The vertical side of the triangle is about 100 handles so the ramifications of the move cannot be understated. The peak in utes in April 2013 is very important. Since utilities traveled lower after the peak, any old-timer will tell you that a large market sell off and continued extended weakness would be expected for equities starting within a couple months of the peak. Alas, the Fed and BOJ money-printing was too powerful in 2013 continuing to pump asset prices higher and negate fundamentals and technicals.

Perhaps the effects from weaker utes, which should have been felt last year, will now occur this year. The 20 MA slipped under the 50 MA which is bearish. Bulls can recover and push equities higher if they push price above the 50-day MA at 493.29. Remember, the ute numbers from 15 weeks prior are very important to determine if the weekly trend is up or down, and the broad markets will follow this trend. This week was an odd holiday week since New Year's occurs mid-week. Watch 482.19 through next Friday, 1/10/14, and then 480.00 between 1/13/14 and 1/17/14. Thus, to make it all very simple, consider the 480-482 area as a trap-door and if price falls through, the markets will see carnage that will have all analysts and traders rethinking their 2014 prognostications. However, if UTIL moves above 493, the market bulls will be in clover again. Watch this chart very closely during January. 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.

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