The utilities are deciding the fate of the US stock market currently. It is historic price action. The closing price for the utilities 15 weeks ago determine if utes are in a weekly uptrend or downtrend and this, along with the 50-wk MA, forecast the strength of the stock market ahead.
UTIL is at 928 basically under the 50-week MA at 977.40 since late September which portends a weak stock market. UTIL fell below the 927 on Friday which is a new weekly downtrend and horrible news for the stock market but by the closing bell, the bulls dragged UTIL back above 927 (orange circle and line).
Now it is time to separate the men from the boys. The stock market has to make a big decision over the coming days and the downside would likely be catastrophically ugly. With the loss of UTIL 939 (blue circle), the stock market is currently in a crash profile.
When the opening bell rings on Monday morning at 9:30 AM EST, UTIL begins at 928 well below the 939 needed to prevent utes from falling into a weekly downtrend. Carnage in the stock market is likely if UTIL cannot regain 939 in quick order after the opening bell.
When the 50-week MA is below the 15-week lookback trend, that level is called the trap-door where bad things happen to stocks due to the double-whammy utility failure. In this example, the 50-wk MA at 977 is in failure mode for many weeks so the 939 level can be viewed as the trap-door for the stock market for the week ahead, and price has already fallen through. The bulls must drag price above 939 and close that trap-door as fast as possible, otherwise, there will be Hell to pay.
The 939 bull/bear line in the sand remains in play all week long but for the week of 3/6/23, the 939 becomes meaningless and is replaced with 972 (purple circle). Wow. That is up at the 50-wk MA at 977 so you can see that big trouble will occur in the stock market unless UTIL does not get above 939 next week and then, wait for it, get above 972 for the week after. Thus, by Friday, 3/3/23, at 4:00 PM EST, UTIL is going to need to be at 972 (now at 928). That's a tall order but Anything Could Happen as Ellie sings.
Okay is all that clear as mud? Carlos fell asleep. Jane is drawing New Age symbols in a notebook. Here is it very simply. If UTIL remains below 939, stocks are going to nosedive and there will be blood flowing on Wall Street resulting in carnage ahead. If UTIL moves above 939 next week, the worst is off the table for a little while but bulls must continue to push higher and send price to 972 by the closing bell on Friday. If so, it forecasts a big rally ahead for the stock market. If UTIL fails to achieve 972 by the end of the week on 3/3/23, that forecasts serious bad trouble for the US stock market going forward.
Thus, focus on UTIL 939 out of the gate Monday with price beginning at 928. If the trap-door remains open and UTIL has fallen through 939, don't say you were not warned because if long, you will lose your shirt and of course a lot of money. 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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