UTIL Utilities Weekly Chart Stock Market Teetering On Edge

The market bulls are dodging a bullet as the trading day is underway. The UTIL 50-week MA represents a trap-door in the stock market. If UTIL loses the 573.19 level, stocks will likely go into free fall in quick order. The bulls know this and are fighting desperately to keep UTIL above the 50-week MA. Watch it like a hawk since carnage begins in equities if UTIL loses 573.

The VIX spikes higher to 14.68 but not yet above the 200-day MA at 14.72 (see previous chart). This is why equities recovered from the selling in the opening minutes of trading. If the VIX moves above 14.72, stocks will deteriorate and UTIL may drop under 573 which ushers in major market carnage. If the VIX stays below 14.72, the bulls are fine and should be able to recover today and prevent stocks from moving any lower. 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 9:51 AM: SPX 2091. UTIL 575.56. VIX 14.52 so the bulls are holding the line. Volatility is starting to move up again; watch it closely.

Note Added 10:16 AM: SPX 2092. UTIL 573.12. The 50-week MA is 573.13. Failure by one penny. As the astronauts said decades ago, "Houston, we have a problem." VIX is at 14.43 not yet above the 14.72. Markets are on the verge of creating a dramatic 'event' and no one knows it yet. Bulls must push UTIL higher or the stock market will begin selling off in force.

Note Added 10:19 AM: SPX 2092. UTIL 573.13. The 50-week MA is 573.13. The drama builds. By price hesitating at the key UTIL 50-week MA it verifies how critical this level is. Utilities determine the immediate fate of the stock market. Bounce and bulls win, failure and market carnage begins. Since the VIX is not above its 200-day MA the bulls have the advantage to create a bounce. VIX 14.23.

Note Added 11:17 AM: Bingo. SPX 2083. UTIL 571.73. Failure. VIX 15.03. Failure. Markets are in trouble. Dow is down 165 points but that is surprising since with the UTIL failure a 200 or 300 point down day for the Dow would be expected. If it does not occur today, then on Monday. Things should become far uglier--unless bulls can send VIX lower or UTIL higher. Every minute that goes by brings equities closer to a significant downside flush.

Note Added 12:32 PM: Dow is down 231 points; now that is more what is expected considering the UTIL 50-week MA trap-door opened. VIX is 15.55. The Keybot the Quant algorithm is tracking VIX 15.76 as a key bull-bear level. If VIX moves above 15.76 the bulls will be bludgeoned further today and the Dow will be down three hundo. If the bulls can prevent VIX 15.76, only 21 pennies away, and keep volatility at VIX 15.55 and moving lower, then stocks should recover (bulls will be okay if VIX stays under 15.76; bears win big if VIX moves above 15.76) Keystone took profits on the quickie SDS long trade mentioned the other day comically catching the exact market top with the negative divergence analysis when the trade was entered. SDS is the 2x short play against the S&P 500. There is no use passing that dough up so the position is closed. Remember, the Keybot the Quant algorithm remains short and that maintains about two-thirds of the portfolio on the short side so there are plenty of short instruments in play currently. Keystone bot BALT opening a new long position due to its attractive positivie divergence set-up but as always, these trades are extremely dangerous and speculative. BALT was traded successfully on the long side a couple weeks ago and now price has come back down to give it another whirl. Keystone will likely add to BALT if it keeps falling.

Note Added 1:51 PM:  Here we go; VIX 15.74. The Keybot algo adjusts the VIX bull-bear line to 15.81 only 7 cents away. If VIX moves above 15.81, markets will go into a mini crash event with the Dow losing over three hundo. Market bulls must prevent 15.81 with all their might, otherwise they will fold like a cheap suit and need a weekend to recover from their beating. What say you markets? VIX 15.69....... 15.68..... bulls are fighting with all their might...... 15.70 ....... the drama continues....... 15.69 ...... bounce or die....

Note Added 2:14 PM: Volatility drops and stocks recover. VIX 15.35. Bears need VIX  15.81 to cause more market carnage. Bulls have stopped the market selling as long as VIX does not move above 15.81. UTIL is at 570.36. Bulls will mount a huge intraday recovery into the clsoing bell if UTIL moves above 573. Markets will move sideways if UTIL stays under 573 and VIX under 15.81; these are the two key market metrics to follow which are currently controlling broad market direction and these levels will remain important into Monday trading. Whoa. Here comes the VIX again moving higher....... fasten seat belts and install helmets their may be turbulence ahead........VIX 15.55..... 15.61.... 15.68.......

Note Added 8:04 PM: The bears did not have the oomph to push VIX above 15.81. UTIL remains under 573 which will cause ongoing weakness. The NYA 40-week MA failed which is a cyclical market signal now turning from a bull market to bear market. The CPC put/call ratio spikes to 1.28 which indicates a near term top at hand. Remember when the low CPC printed a few days ago, 2/20/15, that showed uber complacency in markets so Keystone called for a top within days, which occurs, then the spank down. Now the opposite with the CPC spike above 1.28 showing tinges of fear and panic which indicate a bottom very near. The CPCE did not yet spike higher so there may be more selling Monday but a near-term bottom early next week is likely and a recovery rally. The UTIL and NYA weakness signals ongoing weakness in the stock market after any very short term bounce occurs. NYA 40-week MA is 10846 and the most important thing to watch Monday at 9:30 AM EST. As NYA goes, so goes the markets. That was entertainment today. Keystone packs away the guitar and sound system until next week; don't forget to leave a little something in the tip jar on the way out.