Monday, June 1, 2015

UTIL Utilities Weekly Chart

Lots of drama ongoing with the utilities these days. The closing print 15 weeks ago determines if the utilities are in a weekly uptrend or downtrend. The broad stock market is typically in rally mode when the utilities are in a weekly uptrend. Alas, the utes have been in a downtrend and this week's comparison number is 600 from 15 weeks ago. Bulls win big if UTIL moves above 600 by Friday's closing bell. The other thing to watch is the 50-week MA that Keystone refers to as the 'trap-door'. Simply look at the price action over the last three months to verify the importance of this signal. The 50-week MA is 584.38 and if this fails, the stock market will likely drop like a stone beginning at anytime after the failure and typically within about one-half hour's time. The SPX would be expected to dump about 20 or 30-handles quickly.

The bulls have been successful at preventing the 50-week MA failure and in March when things fell apart, and May, the bulls quickly recovered. This is another cyclical indicator so lump it in with the previous NYA 40-week MA cross and UPS 20/50-week MA cross charts. The stock market will be in serious trouble if UTIL 584.38 fails. If price stays above 584.38 and moves higher the market bulls are fine.

Note that the 15-week lookback number for next week is 594 and then two weeks from now down to the 570 level thus the comparisons become easier to make the bulls happy. If the bears are going to push the broad market lower they better begin the move this week or next, otherwise, the bulls are going to gear up for a summer party instead. The sideways triangle indicates that a break up or down is imminent anytime over the next couple weeks and the move may be about 50 handles (650 target on upside or 540 target on downside). 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.

Note Added 6/8/15: The utilities failed last week dropping to a low at 560.10 not seen since last October in this morning's trading. 

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