Utilities, UTIL or DJU, are a key driver of US stock market direction as the new week of trading begins after the Summer Solstice yesterday. Keystone's large solar calendar off to the side of the patio registers the longest day (shortest night) of the year yesterday. The shortest day (longest night) of the year is December 20th or 21st six months from now at the Winter Solstice. When the plasma wave from a solar flare fries the electronics on Earth, Keystone can keep time for everyone with the solar calendar like the ancients. Anyhoo, utes are the subject at hand.
The two key metrics are the closing price from 15 weeks ago that determines the weekly trend that in turn impacts the stock market, and the 50-week MA at 1116 that is a trap-door for stocks.
Right now, the bull/bear lines in the sand are 1180.42 and 1116.48. Price begins at 1120.43 creating negativity in equities because it is below 1180 but also creating positivity because it is above 1116. Obviously, bulls win bigtime if utilities continue higher but bears are back in business for more downside with stocks if the 1116 fails.
For next week, that transitions into July trading, the 1180.42 is meaningless and replaced with the blue circle at 1121.89 a much easier bridge to cross for the bulls with price at 1120 now. Thus, the bears better growl this week or the bulls may experience success through the July 4th holiday. Note, however, that for July, the bulls must be at or above the 1150 area represented by the purple, orange and grey circles. Thus, mathematicians say thus a lot, that is why Keystone was not invited to the Summer Solstice party at Stonehenge, the bulls need utilities to rally bigtime now and going forward during July to stave off ugliness in the stock market.
What does all that mumbo jumbo mean? To start this week, the bulls will keep the stock market buoyant with UTIL above 1116. Bulls will win going forward if UTIL remains above 1116 moving higher. If UTIL finishes the week above 1122, it is a rosy path ahead for stocks.
Bears need to push UTIL below 1116 immediately to provide a negative path ahead for equities. Bears must finish the week with UTIL below 1116 if they want to wreak havoc in the stock market going forward. Now you know what to watch. Easy-peasy. Keep in mind that if UTIL starts falling apart, and loses 11 hundo heading lower, the US stock market will likely crash going forward. XLU is trading down -0.5% in the premarket so the bears may want to play today. S&P futures are flat to lower about 3 hours in front of the cash open.
The Keybot the Quant trading robot remains short but is champing at the bit to go long the last several days. Utilities will likely dictate the path forward for the quant. Time to wake up this crowd with a rock and roll Bohemian vibe. Bohemian Like You by the Dandy Warhols. 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 7:24 PM EST: The bulls came to play knowing they must defend 1116 with all their might, and they did, out of the gate and for the whole session. When price dropped, the bulls started pumping to keep UTIL buoyant and above 1122 already thinking about next week. Nothing has changed. Price is 1127 creating bearishness below 1180 but also creating bullishness above 1116. Stocks were soggy today but could not make any headway south because volatility remains relaxed and UTIL remains above 1116 refusing to fail and open the trap-door. Well, tomorrow is another day so this drama continues. Fed Chairman Greenspan died at 100 from Parkinson's. He created the housing bubble trouble with crony easy money policies but could never bring himself to admit it. Keystone worked with a guy many years ago his name was Jim Parkinson. Sadly, he got Parkinson's. Tragically, he had a wife and five kids. Instead of Jim Parkinson, he probably wishes his name was Jim Lottery.
Note Added Wednesday Evening, 6/24/26, at 5:01 PM EST: UTIL is pumped to 1149. Of course, the bulls know the importance of the utilities. If a big selloff occurs in equities, the bulls hope they can minimize the downside damage with higher utes.
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