UTIL Utilities Weekly Chart; Potential Double-Top (M-Top)

Obviously, the Federal Reserve's Fall QE program, instituted after the September liquidity crisis, that Chairman Powell says is not QE, pumps the stock market into the stratosphere to end the year. The central bankers are the market.

That long white candlestick in the UTIL chart above 2 weeks ago is a knife that eviscerates and disembowels the bear's belly. The pop in utilities sunk the bear's hope for a sloppy finish to the year for the stock market. That said, when a stock or index rallies continuously during the month, it usually finishes the month weak.

UTIL is placing a potential double-top, or M-top pattern. However, the two-leg bear flag pattern that was looking for a failure from the 20-week MA, which is also the middle band shown in the chart, that Keystone posted a couple weeks ago, did not occur, so that pattern is nullified. Most tickers have momentum into year-end so the bulls have the wind at their backs into 2020. The sellers have given-up.

UTIL price has not quite made a higher high so watch the utes to see if that occurs but it is close enough to assess divergences. The negative divergence (red lines) are on full display wanting to see weakness ahead for price. As mentioned, watch to see if price moves higher to firmly take out the late-September early-October highs. If so, and the indicators remain in neggie d, the top is in.

The Aroon green line is overbot and the red line oversold both indications are bearish going forward but as seen for the last few months, that relationship can be maintained for a while. Price is at the top of the blue sideways channel so it will either break-out in upside glory or receive a spankdown of misery. The upper standard deviation band is at 887 and has to be respected. UTIL may very well jump to there if it breaks out higher this week.

As Keystone has explained many times, the old-time trader's use the UTIL weekly trend and the 50-week MA as key forecasting tools. The weekly trend is identified by the closing price 15 weeks ago. As long as utilities remain in a weekly uptrend, the stock market bulls are joyous and happy. Trouble is afoot when the utes lose the weekly uptrend. Disaster occurs for stocks when the 50-week MA (now at 813) is lost.

Investors continue to jump into utilities, staples and real estate plays, also telecoms to some extent, as defensive plays at any sign of stock market weakness. Many traders believe in the business cycles and are now shifting into the perceived safety of these plays as the economic cycle plays out. However, the Fed and other global central bankers have destroyed all price discovery in markets as well as the business cycle. We are in the longest economic expansion and stock market bull rally in history. Do you understand that it was created by the central bankers or are you a stupid idiot?

The investors flooding into these perceived safety plays such as utes and staples are going to have their head handed to them on a platter over the next year or two. The utes and staples are at the same nose-bleed prices as all other asset classes. The central banker easy money over the last 11 years has forced all asset classes higher including stocks, bonds, real estate, vineyards, art, collectibles, antique cars and yes, utilities and staples. It is a sick world the central bankers have created trying to cover up for the elite class that destroyed America and the middle class over the last five decades. The world is awash in liquidity and in greedy b*stards.

So the next couple weeks tells a huge story for the stock market going forward. The closing price for UTIL 15 weeks ago was 862.90, call it 863, so it is easier to remember. UTIL begins the new week of trading at 876. The 863 bull-bear line in the sand is in play for all of this week and markets are closed on hump day for the New Year's holiday.

Bulls need to keep UTIL above 863 this week and they will be happy with the stock market remaining buoyant. Bears need UTIL below 863 to create stock market negativity.

For the week of 1/6/19, the first full trading week of the year, UTIL 876.46 is the closing price 15 weeks ago and the bull-bear line in the sand for that week. Look at price. UTIL is now sitting at 876. If you are a skilled professional technician, it does not get anymore exciting. The behavior in utilities over the next two weeks will dictate the path ahead for the stock market in early 2020.

For the week of 1/6/19, if UTIL loses the 876.46 level, which it currently is under, there will be H*ll to pay in the stock market. Bulls must keep UTIL above 876.46 for the next two weeks straight to prove that they are in full control and more new record stock market highs are coming.

Thus, the table is set. Watch UTIL 863 this week, if it fails, big trouble is on the way. If UTIL remains above 863, the stock market remains groovy. At 4 PM EST on Friday, 1/3/19, when the week ends, focus on where UTIL ends. If UTIL finishes the week below 876.46, that provides a heads-up to tell you there is big trouble coming going forward. If this scenario begins playing out, and UTIL loses the 50-week now at 813, the stock market can potentially crash or at least drop significantly and sharply very quickly. 

The reason the next couple weeks is so key is that if utilities do fail into the bear camp, this indicates that the potential long-term multi-year top in the US stock market is occurring in real-time. Keystone has been giving the play-by-play for the epic stock market top; it is very close and we may be sitting directly on top of it right now depending on what happens to the utes over the coming days.

The bears were stabbed in the face two weeks ago with the big up in utes. Will the bears provide payback over the next couple weeks forcing utilities into the bear camp and creating an extremely negative path for the stock market ahead, or, will UTIL be pumped erect again by Chairman Powell's magical Viagra-for-stocks easy money? We will know in a few days. Keystone remains short the utilities. 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 Tuesday Morning, 12/31/19, at 7:38 AM EST: US stocks are negative in the Monday session. UTIL finishes down -0.1% at 875 and printed a low (LOD) at 871. Remember, the bulls must push UTIL higher, above 876.46 by Friday afternoon, or there will be heck to pay, come Monday.

Note Added Wednesday Morning, 1/1/20: Happy New Year. UTIL is at 879.17.