UTIL Utilities Weekly Chart

The 15-week lookback determines whether utes are in an uptrend or downtrend and the 50-week MA is another key signal. If the stock market is headed for a significant extended downturn, utilities will either lead the way down or move lower coincidentally. For the week ahead, if you count back 15 weeks, you arrive at the purple circle so a weekly uptrend remains in play unless price loses the 690-ish level. Note that the comparisons become even easier for the market bulls over the next two weeks. Then price rallied higher for June and at the brown circle arrives at the critical 50-week MA this will be more difficult for the bulls to remain above.

The 50-week is at 711 currently so this number needs watched very closely for the week or two ahead. If the stock market sells off but UTIL does not fall under 711, the market will likely recover and rally. If stocks move lower and the 711 fails, the stock market is in serious trouble. If UTIL then loses the uptrend, as identified by the price 15 weeks prior, the stock market is in serious major trouble and likely falling or will fall like a rock.

Stock market bulls need the utes to recover in the week ahead and move above 726 heading higher. Interestingly, if you fast forward five weeks ahead, to early October, the 15-week lookback comparison number will be at the 50-week MA and a failure at that 711-ish level say a  month out, will indicate major stock market trouble ahead. Watch the utilities very closely going forward.

If the utes remain elevated into the end of the year with UTIL heading higher to the 770 area again, the bulls will be celebrating with copious amounts of spiked eggnog while dancing on tabletops wearing Santa Claus hats. The bulls will high-five each other telling one another how smart they were to stay long the stock market as the SPX prints near or above 3K.

If the utes remains soft, like the last couple weeks, and trend lower with a downward bias and lose and remain below the 711 level into year-end, the stock market is likely toast and the bears will be celebrating with wine and song during the holidays as the stock market is crashing into oblivion. 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 Thursday Morning, 9/6/18, Before the Opening Bell: UTIL explodes higher to 740 as the stock market sells off slightly. This hints that despite stocks selling off and falling further, the move is likely not the long extended substantive multi-month and year down move for stocks. If so, the utes would be expected to be falling with the broad stock market. Stocks may recover as the utilities then roll over which would lead the path lower to long-term misery for stocks.