UTIL Utilities Daily Chart Key Levels Dictate Broad Market Direction

UTIL utities chart will lead the broad markets moving forward. The broad market pull back recently was easily forecasted from the negative divergence in the charts. When the indexes rolled over in February the utes did not and in fact took another couple weeks to finally flush downwards. For longer term extended selling to come into the broad markets, the utilities should lead the way down. Since the utes did not, then it was expected for the broad markets to come back up, which they did.

If UTIL stays above 402, the purple line, the broad markets will move sideways or sideways up this week. If UTIL falls below 402 then the broad markets will be selling off. If the red line is lost at 394, the broad markets will go into free fall. The blue line comes into play on Friday. The utes must stay above 406 by Friday's close, otherwise, the broad markets will start the next week, 4/4/11, in trouble.

The bears are receiving help from the 20 MA crossing down thru the 50 MA. One gap above and two gaps below. Note the rising wedge over the last two weeks which is bearish. The projected tip of the rising wedge, the 50 MA and the gap above form a confluence at 411-412 and would be an ideal near term ceilling. Should the utes turn down and lead the broad markets lower this time, then expect extended market selling that will be weeks rather than days. The 402 level is critical this week, above and market bulls are happy, below and market bears are happy. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here or any links connected to this information. Consult your finanical advisor before making any investment decision.