UTIL Utilities Weekly Chart

It is a good time to check out the utilities weekly chart since there is drama at play. There are 2 important parameters to watch as originally highlighted by Norm Fosback decades ago; the closing price 15 weeks ago and the 50-week MA. The 15-week lookback dictates whether the utilities are in a weekly uptrend or downtrend. This is important since utilities typically display a new weekly downtrend coincidentally or a couple months in advance of the overall stock market dropping (or new weekly uptrend for a stock market rallying).

The US stock market is in trouble if utes fall into a weekly downtrend (like now). The second parameter is the 50-week MA currently at 959.95; the trap-door. Do you think it is a trap-door? Look at the chart. Price collapsed through the 50 in June and then the bulls have been battling ever since to keep that trap-door closed (keep price above the 50-week MA).

When the utes are in a weekly downtrend and the 50-week MA support gives way, that is big trouble for the US stock market. In addition, if the US stock market sells off and remains soggy, its path forward of either despair or renewed happiness is dictated by the 2 utility parameters, and that is where we are at now.

The bulls push UTIL back above the 50-week MA two weeks ago and price took off like a rocket putting ample distance between itself and the 50. This helps create the rally in stocks recently. The trap-door will have to be put on the back burner and since UTIL is above the 50-week MA, a complete collapse in stocks a la an epic crash is taken off the table, only for now.

The current battle is at the 15-week lookback numbers. UTIL closed 15 weeks ago at 1042.69 (blue). Price is at 1019. If UTIL moves above 1047 this week, the bulls will have a huge upside party with dancing girls and confetti. If UTIL cannot move above 1047 this week, remain skeptical.

The number to watch is UTIL 999.90 the 15-week lookback number for next week (purple). UTIL is at 1019 not far from 1000. Thus, if UTIL ends this week of trading, at 4:00 PM EST Friday, remaining above 1000, stocks will rally early next week. If UTIL finishes this week under 1000, that spells trouble for next week that should have a soggy stock market. Watch the UTIL 999.90, call it 1000, bull/bear line in the sand today through Friday to know what is coming.

If the bears win going forward and the weekly downtrend remains for utes, watch the 50-week MA trap-door. If that opens, the stock market will fall through and there will be Hell to pay. If UTIL remains below the 50-week MA, the stock market is going to sell off and remain in bad shape for many months if not a year or two to come.

If UTIL pops above 1042 this week or remains above 1000 next week, the bulls will be sending the US stock market higher continuing the relief rally and upside party. If UTIL loses 1000, the storm clouds will form. 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 Evening, 8/3/22: UTIL drops to 1003 today teasing the 1000 level but recovers closing near the highs at 1026.

Note Added Sunday, 8/7/22: UTIL ends the week at 1014 above 999.90 which will help the bulls to begin the week. The 999.90 remains key through Friday but will increase to 1007.16 for all of the following week. Thus, UTIL has to above 1007 come Friday afternoon or there will be trouble that following week. If UTIL falls below 999.90 this week, it will create trouble for stocks so watch it closely especially in the early trading.