The utilities are once again in the pickle barrel portending very bad things ahead for the United States stock market. The 50-week MA is important as well as the closing price 15 weeks prior which determines if utes are in an uptrend or downtrend which then forecasts the direction for US stocks.
The price action for the last half-year is sideways choppy slop so the utilities have been signaling major trouble, but then the bulls battle back to nullify the signal, then the trap-door opens again, but the bulls keep managing to recover and prevent the guarantied negative outcome. Here we go again and this one may be the real deal.
When both of the above metrics fail, US stocks will peak-out either coincidentally or within 8 weeks and a significant downtrend in stocks will begin. It is not a run of the mill pullback. A utilities failure signals that the coming drop in stocks will be far worse than a regular pullback.
UTIL falls to 923 far below the critical 50-week MA at 957.40 and closing price 15 weeks ago at 953.58. Price has collapsed 30 points below the two critical metrics an extremely bad omen for US stocks going forward.
Further, the 15-week lookback comparison number for next week will be 945.77 and the 953.58 becomes meaningless. For the week of 5/29/23, the Memorial Day holiday-shortened week, the 15-week lookback number is 953.61 and the 945.77 will become meaningless. For the week of 6/5/23, the 15-week lookback number drops to 928.44. Thus, the failure in utes is maintainable for at least a couple weeks if not far longer (this signal may be difficult for the bulls to reverse).
The debt ceiling drama in Washington, DC, is creating the sideways action in stocks and this may continue into early June when the situation will be resolved one way or the other. The majority of traders expect a big rally after the debt ceiling is resolved. In addition, the standard path in front of a debt ceiling deadline is stocks drop creating fear and a sense of urgency which provides an incentive for the *sshole politicians to cut a deal. That is not happening this time around, at least not yet, although Friday is the new moon.
The utes failure tells you that stocks will peak-out and begin descending anytime forward. If stocks drop into the debt ceiling decision, the utes tell you it will not matter and stocks will continue lower. If stocks remain elevated into the debt ceiling decision, they will likely drop regardless of whether Congress resolves the matter or not.
The utilities trap-door has opened for the US stock market. The bulls only hope is to rally UTIL above 953 as fast as possible. Something wicked is coming your way and the vast majority of folks are clueless. Keep watching UTIL going forward. 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 Thursday Morning, 5/18/23, at 7:16 AM EST: UTIL collapses to 921 a harbinger of bad times ahead but for now, the party is in full swing with traders tripping over each other to buy stocks.
Note Added Friday Morning, 5/19/23, at 5:53 AM EST: UTIL tanks further to 917 with a LOD at the 909 palindrome.
Note Added Saturday Morning, 5/20/23: UTIL ends the week down at 914 remaining in failure mode and predicting very bad things for the stock market for the weeks and months ahead.
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.