UTIL Utilities Weekly Chart

Utes are a useful tool in predicting and verifying stock market behavior. The two key metrics are the closing high 15 weeks ago and the 50-week MA now at 974.36.

UTIL is at 1013. The closing price 15 weeks ago was 980.42 (count backwards 15 candlesticks; blue circle). If the weekly trend in the utilities, as dictated by the 15-wk lookback, is higher, that portends bullishness for stocks going forward. If the weekly trend turns into a downtrend with current price below the closing price 15 weeks ago, that spells trouble for the stock market. The utilities can provide a warning for the stock market from zero to 2 months ahead of time that a big down move is on the come.

Utilities rally since June; both utes and the broad US stock market placed their bottoms at the same time. Utilities are flat over the last 6 weeks or more. Tomorrow, at 9:30 AM EST, when US stocks begin trading in the regular session, UTIL begins at 1013 above the 980.42 bull/bear line in the sand for all of the week creating buoyancy for stocks. Equities may also be buoyant into the Wednesday Fed meeting which occurs about 80% of the time.

So that all sounds groovy for the bulls, but lets continue the exercise for a few weeks. For the week of 9/26/22, the 980.42 is meaningless and replaced by 888. It should be easy for bulls to keep UTIL above 888 so the next couple weeks may be happy time for bulls. For the week of 10/3/22, with the October chill in the air, 888 is meaningless replaced by 954 (green circle). For the week of 10/10/22, the 954 is meaningless and replaced by 993 as the important bull/bear line in the sand.

Thus, if you want to be bullish the stock market, you need UTIL to remain above the 980-993 level over the next month and all should be fine.

The second metric is the 50-week MA at 974. This is a trap-door for the US stock market. If it fails, there will be Hell to pay. If you can walk and chew gum at the same time, combine the two metrics to paint the picture forward.

For this week, bulls are happy as long as UTIL remains above 980.42. If  980.42 fails, the US stock market is in serious trouble and if 974 gives way, equities will go into a crash profile (serious stuff). The bullish outcome is most likely.

If Federal Reserve Chairman Powell does not crash the markets on Wednesday, the bulls may be in good shape for a couple weeks. Utilities popped big in late July which makes it difficult for utes to maintain a weekly uptrend 7 weeks out so that hints at serious trouble in the early and mid-November time frame.

Watch the UTIL closing number from 15 weeks ago and the current 50-week MA since they tell you a lot about the behavior of the US stock market. 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 Friday Morning, 9/23/22, at 8:06 AM EST: Stocks look sick with futures down big. UTIL fell to 985 yesterday teasing the 976-980 doom level. Today will tell the tale.