UTIL Utilities Weekly Chart

The utes are giving up the ghost over the last three weeks. The red lines show the higher high in price compared to last summer while all the indicators are sloping downwards (negative divergence). Price was running out of gas. The thin red lines show the rising wedge pattern which is bearish. RSI and stochastics were overbot agreeable to a move lower. The neggie d spankdown occurs.

The drop in utilities is important because a multi-year top in the broad stock market would be very less likely if UTIL was continuing to move higher. Now that utilities roll over, a significant top for the stock market is on the table at anytime over the next couple of months. UTIL rolled over last summer and the broad stock market followed directly after. Perhaps something similar will happen this year.

The two numbers to watch are first, the closing price from 15 weeks ago and second, the 50-week MA.  The price 15 weeks ago is 697.28. This number is key for everyday this week. If the UTIL price falls below 697, now at 702 to begin the new week of trading, that places the utilities in a weekly downtrend which portends stock market trouble ahead. If the market bulls can keep UTIL above 697.28 and heading higher, the stock market will likely remain buoyant and floating higher. If 697 fails and UTIL is dropping, a rupture of the 50-week MA at 680.41 would be a major failure. This action would open a trap-door in the broad stock market and prices will flush quickly lower.

For now, UTIL is at 702 above both key levels 697.28 and 680.41. The chart indicators are ugly. Stochastics are weak and bleak crossing under 50 into bear territory. Watch to see if the RSI goes sub 50, or not. Things are getting interesting. 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.