UTIL Utilities Weekly Chart; Utilities Will Dictate the Seriousness of the Pending US Stock Market Drop

Exciting times. In the coming days, we find out how bad the pending pullback in the US stock market will be based on the behavior in the utilities. The utes and stock market have been goin' up, goin' down, goin' up, down, down, up, anyway you want it let it roll, Baby What You Want Me To Do, as Jimmy sings.

The previous UTIL chart lays out the ongoing drama. The 50-week MA, now at the 949 palindrome, and the 15-week lookback number at 971 are key for the week ahead. The following week the 971 is meaningless and replaced by 956. The 949 remains consistent going forward give or take a point. For the week of 7/31/23, that goes into the first week of August, the 956 is meaningless replaced by the 969 palindrome.

Do you see the cluster of closing numbers from 15 weeks ago? All the 15-wk lookback comparison numbers for the next month or so are above 956. Write that down. The 50-wk MA is 949. These numbers dictate the severity of the pending downside in US stocks ahead.

As per the put/call ratios, the stock market complacency and fearlessness is off the charts. The Uber driver said he just went triple-leveraged long. No one believes that stocks can ever go down again. People laugh at recession calls and proclaim that even if a recession occurs, you will never notice it. The AI orgy is in full swing with Silicon Valley tech's dancing around in their birthday suits, only wearing their fleece vests displaying the company logo, buying chip stocks with both fists, then swigging down more Fed wine and Congressional champagne. As this off the charts bullish euphoria continues, bulls opine how they cannot believe how everyone is bearish on the stock market. It's funny. It is the same jackass stuff each time.

So stocks are set to drop and the SPX will fall probably between 150 and 400 points (run of the mill -3% to -10% pullback). The SPX weekly chart will tell you if the top is in on the weekly basis after the price candlestick begins printing tomorrow. Now we get into the fun.

For the week ahead, UTIL 949 and UTIL 971 are the key bull/bear lines in the sand. UTIL begins the week at 928. Keep in mind that UTIL 956 is key next week which is an easier level to achieve and calls out the 949-956 range is the resistance gauntlet for next week. This week it is 949-971. Check UTIL at 4 PM EST on Friday since that closing price will tell you a lot about the following week (does the week ahead finish above or below the 956 and/or the 949?).

Now that your eyes are glossing over, We can simplify things. If UTIL trends lower from 928 and places a lot of distance between itself and 949, that SPELLS MAJOR TROUBLE FOR US STOCKS. Instead of the run of the mill pullback, the US stock market may actually crash and the losses ahead for the coming weeks and couple-few months would be -10% to -50%. Annihilation. People may jump from windows but like Timmy Trader, that jumped from a window on the trading floor during the 2008-2009 crash, hopefully, they will be also be on the ground floor.

If utes drop, it tells you powerful doom and gloom is on the way. If UTIL rallies and moves above 949, it is a big deal. Stocks will still peak and begin selling-off in the days ahead, probably for a few weeks, but the pullback will not be the gloom scenario instead a modest -3% to -10% pullback in US stocks.

If UTIL takes out 949 and then 971 this week, stocks are going to remain buoyant and the pullback will not be that significant. Ditto if price takes out 949, and then takes out 956 and ends the week on Friday above 956, that tells you that the stock market pullback will not be a big deal (and a huge pullback perhaps delayed until the infamous September/October period).

The 200-week at 903 is playing a pivotal role and helping to create the ongoing long-term sideways triangle pattern. If 903 fails, it is likely that the US stock market is going to crash more than -10% during the pending pullback.

UTIL is in a sideways symmetrical triangle pattern and not yet tipping its hand on which side of the triangle it will exit. The stock market is riding on the move from the triangle. Will it drop out the bottom? Price is testing the lower trend line of the pattern deciding to bounce, or die. The thick vertical line of the triangle is from 870 to 1010 that is 140 points. Thus, if price collapses from 903, which will bring on doom and gloom, the downside target for UTIL would be 763 (903-140). Instead, say price bounces above 940 ready to break-out higher, that outcome would target 1080 on the upside.

Summing up the mumbo-jumbo, utilities are in failure mode currently predicting that the US stock market will top out at any day or time forward and begin a long and dramatic downfall (potential crash). This horrific outcome for US stocks can be lessened if UTIL moves above 949 as discussed above. Regional banks will be reporting earnings which may create turmoil. US stocks are going to begin selling off and the utes this week and next will tell you how bad the selloff will become. 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.