UTIL Utilities Weekly Chart; Battle for 50-Week MA

UTIL is testing the 50-week MA at 654.49 with important consequences resulting depending on which side price pivots.  Utilities were in a weekly downtrend (a UTIL chart was posted about a week ago; scroll back or type 'UTIL' into the search box at right to bring it up for further study--sort the search by date) and bounced from the initial try at the 50-week support. Price regrouped higher and then ran south again and this time pierced down through the 50-week opening up a trap-door for the stock market. Typically, bad things happen to stocks starting within two months when UTIL is in a weekly downtrend and also loses the 50.

Utes have been weak for a couple months but the stock market shows no sign of weakness in fact the Nasdaq Composite, COMPQ, prints a new all-time high today. This is very surprising behavior for markets and is testimony to the power that the central bankers have in keeping stocks elevated. The Trump Rally is based on government largess which will fund huge infrastructure projects. Government spending and Keynesian central banker money printing rules the markets for the last eight years.

UTIL price bounced off the lows a couple weeks ago and now comes up for a back test of the 50-week MA. This is for all the marbles. Note the beauty in the price movement coming down and bouncing directly off the 50, then falling through and now up for a textbook back test. If the bearish case wins out, UTIL price will collapse from here. This outcome would be very ominous for the stock market in the intermediate term (weeks and months ahead).

If UTIL continues higher leaving the 50-week MA in the rearview mirror, the bulls will rejoice and may be able to keep the stock market buoyant into the new year. Watch 654.49. It tells you a lot about broad market direction ahead. 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 Friday Afternoon at 1:57 PM EST:  The market bears win the battle with the utilities receiving a firm spank down from the 50-week. UTIL collapses on Wednesday and Thursday down to 622. Ouch. That will leave a mark. UTIL recovers today currently trading at 630 well below the 50-week MA at 654. Market bears smile as they growl softly under their breath.