UTIL Utilities Weekly Chart

The roll over in the utilities in late November early December was very important as Keystone pointed out at the time. As utes collapse, they are typically a harbinger for trouble in the stock market from zero to two months out. As UTIL plummets into correction territory now down in excess of -10% off its top, the stock market prints record highs. What's up with that? It is very rare market behavior and likely the result of nine years of obscene Keynesian intervention from global central bankers. Price discovery has been destroyed over the last few years.

The 50-week MA is key for UTIL as well as the weekly trend determined by the price 15 weeks prior. Utilities are in a weekly down trend since price is below the price from 15 weeks ago (purple circle). As long as the weekly downtrend remains in play for utilities, it should create sogginess in the broad stock market for the weeks and months ahead. UTIL failed at the 50-week MA five weeks ago. A flush lower in stocks typically occurs but alas, these are not your grandfather's markets due to the last few years of global central banker collusion, and instead stocks print record highs. Only last week did the broad stock market roll over to the downside.

You can see the 15-week lookback numbers only become more difficult to attain going forward since UTIL was moving into the top in October and November. So the weekly downtrend for utes should remain in play for at least another 7 or 8 weeks which is plenty of time to create mayhem in the broad stock market.

If UTIL could at least get above the 50-week MA at 722 this will stop the selling in the broad stock market and boost a relief rally in stocks. The lower standard deviation band was violated so the middle band at 731 and dropping is on the table. You can see that middle band which is also the 20 MA, is going to intersect the 50 MA probably later this month of early March. This confluence may create a magnetic effect that will pull the UTIL price up to 720-ish about 3 to 6 weeks out. So if the market bears want to do some damage they better seize the opportunity now without delay.

The red lines show the late November top that Keystone called. It was an easy call with the universal neggie d for all chart indicators and overbot RSI and stochastics and of course the ominous red rising wedge. Remember, the collapses from rising wedges can be quite dramatic and the one above is testimony to what would be expected from a rising wedge.

The MACD line and money flow remain weak and bleak wanting to see another low in UTIL after any bounce occurs for a week or three. The green lines are positively-sloped for the RSI, histogram and stochastics, however, this is not positive divergence since price did not make a lower low at the same time. UTIL is staggering sideways at these levels and remains ill.

If price comes down during the week ahead that will set up possie d wihtthe green lines and bounce price for a week or three but that weak and bleak MACD line and money flow will likely bring UTIL back down again for another low. At that time, maybe a month or two out, we can see if she wants to head higher in a more sustainable way and target the potential confluence at 720-ish.

The main takeaway is utes remain weak for two months and this appears to be continuing. The longer that utilities remain weak, the sicker the broad stock market will become. Pay attention to the UTIL 50-week MA at 722 going forward. Bears remain in half decent shape as long as UTIL remains under 722. 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.