UTIL Utilities Weekly Chart New All-Time Record High Negative Divergence

Utilities are on fire printing another new all-time high today at 560. The sideways symmetrical triangle patterns have been highlighted the last few months and target the 545-580 range which price has already achieved. The red lines show negative divergence remaining in place across the one year period and last few months. The sneaky MACD line is trying to squeeze out some more juice but overall price is topping now, over the coming days and week or three.

The daily chart shows the indicators negatively diverging as well but there is some near term juice developing especially due to today's push higher. Therefore, price should meander at these levels as it searches for a top over the coming days and week or two. The selling volume is clearly outpacing the buying volume despite the new highs. This is distribution where Ma and Pa are getting all bulled up in the excitement and placing their entire life savings into dividend stocks just like the pundits on television are telling them to do. The investment houses are providing those shares to John and Jane Bagholder as they sneak out the back door.

The two key levels the old-timer's follow for utes are the 50-week MA and the weekly close 15 weeks ago. As long as price stays above the 15-week prior close, utes are in an uptrend and indicate that the stock market will continue higher. If you count backwards the brown circle shows the comparison numbers to monitor going forward. Starting next week, UTIL must stay above 523 from here forward, if not, stocks will be in trouble. The 50-week MA is at 508.48 and rising and this will serve as a trap-door indication for markets if/when it fails perhaps a month or two from now. Both these concepts are programmed into the Keybot the Quant algorithm. Utes have been on a scream higher this year creating stock market bullishness.

The peak in utes in July 2012 led to a market sell off. Ditto the April 2013 high which took the stock market lower. The July-August 2013 top was more conicidental in nature. Ditto the April top this year. Thus, the chart clearly shows how utes are a leading or coincidental indicator for markets. At new highs today, the wine is flowing like water, and long traders are staggering around boasting that every day is a drunken party.

Projection is for utes to top out anytime within the next couple weeks and roll over to the downside which forecasts that equities will move down as well. Watch that 523+ level from here forward since it firmly tells you that the stock market has a big problem on its hands. If UTIL stays above 523, the party can continue but note that the 15-week lookbacks climb higher so the comparison numbers will increase to 528, then the 530's, etc..., so one month from now staying above the 15-week lookback to maintain an upward weekly trend may prove very difficult. 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 3:59 AM on 6/19/14: UTIL prints a new all-time intraday high at 564.61 and new all-time closing high at 564.45. XLU prints a new all-time intraday and closing high at 43.75. The stock market explodes higher as Fed Chair Yellen promises more easy money forever.