It's time for the utilities to sh*t or get off the pot. The prior ute chart explained the dangerous game at play. The weekly closing price 15 weeks ago and the ongoing 50-wk MA are forecasting tools for the broad stock market.
When utilities fail into a weekly downtrend with weekly closing prices below the levels from 15 weeks ago, like now, and fall below or are below the 50-wk MA, at 942, like now, it signals a weekly downtrend for utes that will send the broad stock market lower. If both tools are in failure mode, like now, and the US stock market begins dropping, the pullback in stocks will not be a run of them ill -5% or so instead it will be far more even a potential crash.
The 50-wk MA is at 942 so this is straight forward. Price is at the 919 palindrome below the 942 indicating trouble ahead for the broad market. The closing price 15 weeks ago, that is applicable for this week of 7/31 thru 8/4, is the 969 palindrome. The UTIL price of 919 is far below the 969 needed to reestablish an uptrend. These numbers point to nasty stuff ahead for the US stock market as everyone parties like its 1999. Traders buy stocks with reckless abandon, throwing caution to the wind, even as Fitch downgrades the US credit rating. Investors buy stocks with both fists as they sing and dance to Hava Nagila.
The 919 price where utes begin today, the regular trading session begins within the hour, is smack-dab in the middle of the apex of the blue sideways symmetrical triangle pattern. The vertical side is from 860 to 1000; call it 140 difference. Thus, if price breaks out above, which it tried to do a couple weeks ago, the upside target is 930 trend line break out plus 140 = 1070 which would match the prior highs.
If UTIL breaks down from here losing the lower trend line at 910, subtracting 140 = 770 as the downside target. If price starts to collapse, watch the 200-wk MA at 904 which will tell you all hope is lost. Price will then seek 870-880, then 820 to test the lows from last October. Lots of fun is ahead.
For the week of 8/7/23, the 969 is meaningless and replaced with 960. Then for the week of 8/15/23, the 960 is worthless replaced with 962, then for the week of 8/22/23, the bull/bear line in the sand will be 959. Thus, gathering the numbers into a cluster, UTIL must move above and stay above the 959-969 palindrome range or there will be trouble. Price is down at 919 so the bulls have work to do.
Of course, price will first pierce the 50-wk MA at 942 if it wants to go higher. At that point the numbers from 15 weeks ago will become pertinent. If stocks collapse from here, none of the above will matter. The utes would have done their job at providing an early warning signal for bad stuff to happen to the stock market so it is everyone's fault if they do not understand the game. 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 Thursday Evening, 8/3/23, at 5:53 PM EST: UTIL (DJU) drops below 9 hundo to 897. Hey Chopin, play us a few bars.
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