UTIL Utilities Weekly Chart

The market bears had the markets set up to fail for the intermediate term (weeks and months) when price collapsed through the 50-week MA last October-November. The central bankers always stepped in over the last eight years to save the day but this time around it was the election of President Trump. The utilities rally strongly from early November and bottomed exactly at the 62% Fib retracement of the move from 550 to 720 at 616; a textbook Fibonacci retracement.

Remember the battle at the 50-week MA that was ongoing during December-February? Keystone posted the UTIL chart a few times describing the battle which was extremely important and the market bulls won sending price above the 50-week MA at 669. This was a drastic blow to the bears.

UTIL launches higher but is stalling over the last couple weeks. The brown lines show a potential future sideways symmetrical triangle pattern forming so keep an eye on that as the year progresses.

Keystone has been commenting and providing charts showing the potential multi-year tops forming for the broad stock market and high-flying tech names between now and summer time. The stock market will not roll over until the utes roll over concurrently, or, the utes lead lower. The two metrics that will excite the bears that expect a year or three of negativity in stocks ahead are the 50-week MA and the UTIL closing number from 15 weeks ago. Bears will rejoice and stocks will be in trouble if the 50-week MA at 669 fails.

The 15-week lookback number is 632.22 for this week and it is safe to assume that the UTIL price will stay well above this number. Next week, the comparison number 15 weeks ago is 645.86, then 657.72 for the next week. You can see that two weeks from now, for the 15-week lookback numbers, UTIL will be in the 657-662 area for 7 weeks. The 657-670 area is likely going to be a big battlefield during March and April into May which will dictate the future path for the stock market ahead this year into next year.

For the puzzle pieces to come together to create a multi-year top in the stock market in the March-June time frame, the utes must roll over. If you see UTIL drift lower and drop through the 50-week MA and then drop through the 657-662 cluster, you know that the stock market is in serious trouble going forward and a multi-year top in stocks is likely in progress or has occurred. The vast consensus on Wall Street remains bullish with television pundits calling for more new record highs in stocks day after day; they are proclaiming blue skies and rainbows ahead for all. 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.