UTIL Utilities Weekly Chart; Utes Teasing Critical 50-Wk MA Trap-Door at 980 that Would Bring on Serious Stock Market Pain

The stock market takes the pipe today continuing its streak of weakness for the last week. The new moon peaks today so it is not surprising to see the bearishness. Stocks are falling and some of that dough flows into notes and bonds seeking perceived safety so Treasury prices rise and yields fall. This is what you see in recessions.

The Fed was worried about inflation the last few months, as they should, but no one was looking at growth that looks like a 98-pound weakling. High inflation and a slow economy is stagflation like the 1970's. Humorously, King Trump is the new Jimmy Carter.

Anyhoo, utilities have not been able to regain the 1030+ level that continues signaling that utes are in a weekly downtrend which means the stock market should be or will be in a downtrend anytime, and it is. Check.

The second key metric for the utilities is the 50-wk MA now at 980.63. Keystone has talked about this key level many times; it is the trap-door. Since UTIL collapses down to 990.42, the bulls have a black hood on and a noose around their neck standing on the trap-door at the gallows. Time to sing, "O Death." The bulls wonder what happened to the days of wine and roses when it seemed like good times would never end?

Well, they did and a major test is about to occur for utes and the US stock market. If UTIL loses the 980 level and the trap-door opens, it is lights-out for the US stock market. The trap-door will tell you if the pull back in stocks is the run of the mill -3% to -5% drop or if it has potential to be a -10% correction, -20% bear market, or far worse. It will be the latter if the trap-door flies open.

If UTIL loses 980 and it remains below, the SPX will drop 20 to 40 points within an hour, and then everything will get far uglier going forward into the Ides of March. "Et tu, Brute?" They all stabbed Julius Caesar, even his friend, Brutus. With friends like that, who needs enemies? Far Behind.

Watch UTIL 980 like a hawk because the fate of the US stock market going forward depends on that number. If the pullback is run of the mill, stocks can recover and possibly still pull-out a half decent year. If UTIL 980 gives way, there is a high chance that the stock market will crash so it will be a lot of fun. If the -10%, -20% and worse drop occurs and we are going into summer, the stock market will probably be sick all year. 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 Evening, 2/28/25: UTIL ends the week at 1005 keeping the trap-door shut, for now. Keep watching it. The 50-wk MA is moving higher so the line of death is at the 980-985 area for next week.