UTIL Utilities Weekly Chart; 50-Week MA at 1109 Fails Ushering-In Stock Market Negativity

Utilities took it on the chin last week and no one noticed. That is because they are stupid. The utes have enjoyed a bigtime rally higher on the AI trade the last couple years but at 1200+, all indicators negatively diverged against the price, so the top was in, and voila, a multi-week downturn begins now in its sixth week starting tomorrow. The neggie d spankdown packs a punch.

Go back a few charts and read the prior utility chart post as a primer to this analysis. After a multi-week neggie d smackdown, price typically tries to start finding a bottom on the weekly basis. However, all the chart indicators remain weak and bleak. The RSI and stochastics are now sub 50% in bear territory. The money flow is flat so give that a small nod for a potential recovery week or so, but the other indicators want to see lower lows in price going forward on the weekly basis.

The two key metrics are the 15-week ago closing price, that establishes a weekly uptrend or downtrend, and the 50-week MA at 1109. The 50 failed yesterday ushering in market negativity. Now the fun begins.

The orange circle shows the closing price from 15 weeks ago at 1089. The utes remain in a happy weekly uptrend that means the broad stock market should also be in a happy uptrend. If the 1089 is lost, utes will slip into a weekly downtrend and that portends bad things ahead. In addition, look at the big white candlestick in February. The 1089 will be meaningless for the week of 5/26/26 (US markets are closed on Monday, 5/25/26 to celebrate Memorial Day) and replaced with the blue circle at 1171.18. Wowza.

When both metrics fail, the US stock market will typically fall into a significant downturn within zero to 2 months time. Remember, utes rolled over in the Fall last year, and as Keystone described the stock market top that was forming, he had ominous warnings since the utilities were falling bigtime. Then, as the stock market fell the end of February and the month of March, Keystone told you that a crash was off the table and the pullback would be more of the run of the mill variety. The SPX lost nearly -10% but quickly recovered to the current all-time highs. The 50-week MA did not fail at the end of last year and early this year so the fix was in. There would be a pullback due to the negative divergence Keystone was explaining but the serious downturn was taken off the table because utes would not completely fail.

So now we are reset and the utes are in a downturn for 5 weeks going on 6 weeks almost the whole distance of that zero to 2 month time allotment for the broad market to roll over. Things are getting real dicey right now. The broad stock market will be slapped down again and this time we may fall into a crash profile for stocks due to the utility wakness. It will be fun. Just think of all the panic that will show in people's eyes as they lose their shirts.

By Friday at 4 PM EST when the US stock market will close for the week, UTIL, or DJU, must be above the 1171 or there will be Hell to pay during the shortened holiday week that closes out the month. If the 1089 is lost this week, the Hell to pay is now.

So there is lots of fun ahead. Watch the key levels of 1089 and 1109 this week and then 1171 and 1109 next week. Bulls must regain 1109 if they want to take stocks higher again. Bears only need 4 bucks lower in price, to drive it under 1089, and the blood will flow on Wall and Broad.

The new moon peaked for the month about 14 hours ago. This is the darkest time overnight of the month. If King Donnie Trumpski plans to use military force to open the Strait of Hormuz, he will start the operation anytime over the coming days, maybe tonight to take advantage of the darkness with the US's superior night vision technology. Add about 7 hours for Iran time so 6 AM EST now is about 1 PM in Iran. They would be hit at night so look for some potential military action between 4 PM EST (11 PM Iran time) and 10 PM EST (5 AM Iran time). This pattern repeats each day forward for when military actions will resume in the Middle East. US futures open at 6 PM EST in less than 12 hours so it will be interesting to see if King Donnie tries to massage markets and to see how oil prices are reacting.

Good luck to all the Armed Forces in the days ahead especially since yesterday was Armed Forces Day to celebrate the Army, Marines, Navy, Air Force, Space Force and Coast Guard. Cher always knew how to let the men know what they are fighting for. If I Could Turn Back Time. Her son Chas is playing guitar; he used to be little Chastity Bono on the Sonny and Cher Show. The brass got in trouble for the video but it boosted the moral with the men and in the Navy so it was worth it. 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.