UTIL Utilities Weekly Chart; Failure at 50-Week MA at 975 Signals Stock Market Trouble Ahead

The utilities have been testing the key 50-week MA at 975-ish for the last month and the bears are winning. Keystone has posted this chart lots of times. The 15-week lookback and 50-wk MA are all that matter.

If you count back 15 weeks to that closing price (purple circle), you see the bulls are in sorrowful shape to try and achieve that lofty target. For next week, the last week of the year, the comparison number is the brown circle still a lofty goal. For the first week of January, the bulls will need to push UTIL above the blue circle, which forms a confluence at the 975-ish level. You get the feeling that the drama at the 50-wk MA at 975-ish is not finished as yet.

The 15-week lookbacks for this week and next week are lofty goals so the utes will remain in a weekly downtrend and that signals trouble ahead for the broader stock market.

The second metric is the 50-week MA at 975-ish and price is sliding lower. The current situation with UTIL sets up a historic stock market crash scenario to begin at anytime over the next 8 weeks.

The 50-week MA trap-door opened in late September and there was Hell to pay. It took many weeks but the bulls mustered enough energy to battle back to try and close the trap-door but the bulls have failed over the last month, especially the last 2 weeks, hinting at an epic failure on tap for the US stock market. The sell-off to date will look like child's play compared to what is coming.

Now that all that doom and gloom is rolled out onto the trading floor, UTIL is likely not done testing the 50-wk MA at 975-ish. This goofy holiday period will likely place markets in stasis until January. Probably a lot of choppy sideways slop, chop suey, is on tap to close-out the year. The last 2 weeks probably saw a lot of tax-loss selling so a lot of the tax games should be in place now.

Housing Starts are tomorrow, then Consumer Confidence on hump day and sentiment on Friday. Trading volumes are thin which may create some wild moves but it will probably end up as sideways chop until 2023.

In 2 weeks, the 15-week lookback number and the 50-wk MA will both be at 975 and this is too enticing of a showdown area for price to pass up. UTIL looks like it is ready to collapse but it may recover to tease and tickle the 975 again, perhaps stretching the drama to the start of the new year when UTIL will decide up or down as January begins with huge ramifications either way.

At that point, should this scenario play out where UTIL is parked at 975 as January begins, if UTIL moves higher, it tells you that a bull market rally will be on tap for several weeks maybe a couple-three months or more, before trouble will reappear. If UTIL would collapse, like now, from 975, under this scenario, it is lights out for the US stock market and it would be time to prepare for a major market crash.

The utilities posture right now is telling you to get ready for a major stock market crash to begin anytime going forward on a multi-week basis. The only thing to save the day is if UTIL moves back above 975. Watch it like a hawk over the coming days. Keystone does not have any utility trades on right now long or short. 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 Morning, 12/21/22, at 9:41 AM EST: UTIL is at 963 unable to regain 975 this week so far. Each day UTIL is under 975 is another day you should be very concerned about any money long the US stock market.

Note Added Wednesday Afternoon, 12/21/22, at 1:49 PM EST: UTIL is at 970 but inching higher. The bulls are trying to hoist utility's fat arse back above the trap-door and latch it closed. Will they succeed, or fail, at this run at the 975 resistance? No pressure; only the entire US stock market's fate for the months ahead hangs in the balance. Will the bulls thrive under the pressure and poke above 975 or buckle under the stress and collapse lower, folding like a cheap suit?