UTIL Utilities Weekly Chart

The utilities trap-door opened and the US stock market fell through. In past stock market tops, after some selling occured, Keystone said that stocks would recover and rally again and the big epic stock market collapse was not going to happen. The utes tell you that.

There are 2 key numbers to watch; the 15-week lookback and the 50-week MA now at 951. Going back to Norm Fosback and technical analysis from a few decades ago, the utilities closing weekly price from 15 weeks ago dictates whether the utes are in an uptrend or downtrend. Pretty easy stuff. So count backwards 15 weeks and you can easily identify whether utilities are in a weekly uptrend or downtrend. This is key since it matches the direction of the US stock market.

In prior selloffs, the utes retreated but then recovered so you knew the big one, the massive heart attack for the financial markets, was not yet at hand. If stocks sell off but the utes remain in a weekly uptrend, stocks will recover. Bad things happen, however, when stocks and utes sell off and the utes do not recover. That puts you on alert for a major stock market crash ahead.

Last week (actually the Friday before the trouble was predicted), UTIL loses 988.47 which is the closing price 15 weeks ago. The utilities are in a downtrend now which is extremely detrimental for the stock market and exacerbated the selling last week. Many algorithms have the utes programmed into the models. Keybot the Quant has the utility parameters programmed into its model.

The second important level is the 50-week MA and that gave way at 951 this week. It is the trap-door of the stock market and when it opened, all Hades broke loose. Indiscriminate selling accelerated. Timmy the trader could not take all the selling pressure from panicked clients so he jumped out the window. Fortunately, he was on the ground floor. The loss of the weekly uptrend and 50-week MA spells major trouble and an epic stock market crash ahead.

The previous SPX weekly chart explains how a multi-week rally is likely in the offing going forward so July may be a happy month. However, would you like to see a crash you will remember your whole life sometime between August and October? September is typically the worst month of the year. Don't worry. It will be fun. If you are short, that is.

If you want the stock market to recover and finish the year in a happier place, you must see UTIL regain the 50-week MA at 951. That will tell you immediately that the major crash is put on hold for a few weeks or months. Bulls would still need the utilities to establish a weekly uptrend to signal the all-clear for the stock market and look at the chart above. That's funny.

The weeks go up, up and away to UTIL 1080-ish the highs from April. Thus, adding 15 weeks to the week of 4/16/22 is 8/8/22 call it the first couple weeks of August so stocks will be on shaky ground into August. In other words, if you expect the US stock market to recover and do good things this year, you need UTIL to move above 1080 over the next 6 weeks. That's a tall ask, and unlikely, but it can happen.

Thus, with utilities in the tank, the outlook for the US stock market going forward is dire. Watch the UTIL 50-week MA at 951 and the 15-week lookback to see if the US stock market has any hope of recovering this year (probably not). These are exciting times. 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 Wednesday Afternoon, 6/22/22, at 5:05 PM EST: UTIL 912.

Note Added Saturday, 6/25/22: The bulls manage to close the trap-door, barely, at 952.35 with price rebounding to 953.63. Do you think the 50-wk MA is important? UTIL parks itself here for the weekend thinking about its bounce or die decision that must be told. If 952 fails, the path ahead is ugly, painful and sustained. If UTIL continues higher, that probably puts off the pain for a week or two.