Year to Date Market Statistics Favor the Bear

|
 |  Includes: AGG, DIA, FXE, IEF, OIL, QQQ, SOX, SPY
by: Richard Suttmeier
All you hear on financial TV are the cheerleaders who tout that the bull market is alive and well. I have disagreed with this notion, saying that the February 18 highs are the highs for the year. The Dow declined 6.7% from its February 18 high at 12,391.29 to its March 16 low of 11,555.48, and the rebound over the past four sessions has been 4.0%, leaving the Industrials 3.0% below its February high. The NASDAQ declined 8.3% from its February high at 2840.51 to its March 16 low of 2603.50, and the rebound over the past four sessions has been 3.1%, leaving the NASDAQ 5.5% below its February high. The NASDAQ ended last week with a negative weekly chart, which stays negative on a close this week below 2725.
The worst performance has been the Philadelphia Semiconductor Index (SOX) which peaked at 474.33 in mid-February. From that high to the mid-March low the SOX lost 13.8%. The rebound since Thursday through Monday was 3.5%, which leaves the SOX 10.8% below its high for the year.
Stocks Remain Overvalued Fundamentally – We are not operating under a ValuEngine Valuation Warning, but 56.6% of all stocks are overvalued. In addition 15 of 16 sectors are overvalued with five by double-digit percentages.
Tracking the Bearish Moving Average Crossovers – This occurs when the 21-day simple moving average trends below the 50-day simple moving average.
  • Dow – The 21-day and 50-day are converging as resistance at 12,047 and 12,029.
  • SPX – The 21-day and 50-day are crossing negatively today at 1303.57 and 1303.77.
  • NASDAQ – The 21-day and 50-day crossed over on Friday at 2722 and 2743.
  • NASDAQ 100 – The 21-day and 50-day crossed over on Friday at 2300 and 2317.
  • Dow Transports – The 21-day and 50-day crossed on March 14 at 5060 and 5111.
  • The Russell 2000 – The 21-day and 50-day are still converging at 808.02 and 804.36.
  • The SOX – The 21-day and 50-day crossed over on Friday at 439.60 and 445.97.
Closes on weekly charts relative to the five-week modified moving averages
  • Dow – The five-week MMA is 11,994 with declining MOJO.
  • SPX – Stays negative on a weekly close below the five-week MMA at 1299.2.
  • NASDAQ – Stays negative on a weekly close below the five-week MMA at 2725.
  • NASDAQ 100 – Stays negative on a weekly close below the five-week MMA at 2300.
  • Dow Transports – Stays negative on a weekly close below the five-week MMA at 5101.
  • The Russell 2000 – Stays negative on a weekly close below the five-week MMA at 803.96.
  • The SOX – Stays negative on a weekly close below the five-week MMA at 440.81.
The weekly chart for the Dow Industrial Average shifts to negative this week on a weekly close below the five-week modified moving average at 11,994, as momentum (12x3x3 weekly slow stochastic) will be declining under 8.0. This measure scales between zero and 10.0, where a reading above 8.0 defines an overbought condition. Momentum peaked at 9.5 on February 18, when the high for the cycle was reached at 12,391.29. My first downside target is my annual value level at 11,491. A close in March below 11,491 targets semiannual value levels at 10,959 then 9,449 in the second quarter. This week’s risky level is 12,271.
Click to enlarge
(Click to enlarge) Courtesy of Thomson / Reuters
10-Year Note – (3.332) Weekly, annual, and semiannual value levels are 3.496 and 3.796 with daily, and monthly risky levels at, 3.231 and 3.002.
Comex Gold – ($1425.9) Daily and annual value levels are $1417.9 and $1356.5 with weekly, monthly and quarterly pivots at $1440.7, $1437.7 and $1441.7, and semiannual risky level at $1452.6.
Nymex Crude Oil ($104.94) Daily, monthly, and semiannual value levels are $100.62, $96.43, and $87.52 with annual pivots at $99.91 and $101.92, and semiannual and quarterly risky levels at $107.14 and $110.87.
The Euro – (1.4202) Weekly and quarterly value levels are 1.4028 and 1.3227 with daily, semiannual and monthly risky levels at 1.4347, 1.4624 and 1.4637.
Daily Dow: (12,019)Daily, annual, quarterly, semiannual, and semiannual value levels are 11,841, 11,491, 11,395, 10,959, and 9,449 with weekly, monthly and annual risky levels at 12,271, 12,741 and 13,890. Watch the 21-day and 50-day simple moving averages as a zone of chart resistance, and a potential bearish crossover.
Click to enlarge
(Click to enlarge) Courtesy of Thomson / Reuters
Key Levels for the Major Equity Averages
  • The Dow Industrial Average (12,019) Daily and annual value levels are 11,841 and 11,491 with weekly and monthly risky levels at 12,271 and 12,741. Given a close in March below 11,491 the downside is to semiannual value levels at 10,959 and 9,449.
  • The S&P 500 (1298.4) Daily and annual value levels are 1277.8 and 1210.7 with my quarterly pivot at 1262.5, and weekly and monthly risky levels at 1330.7 and 1381.3.
  • The NASDAQ (2692) My daily value level is 2641 with weekly, quarterly and monthly risky levels at 2792, 2853 and 2926. Semiannual and annual value levels are 2363, 2335 and 2172.
  • The NASDAQ 100 (NDX) (2263) My daily value level is 2222 with weekly, quarterly, and monthly risky levels at 2360, 2438 and 2499. Semiannual value levels are 2006.8 and 1927.6.
  • Dow Transports (5167) Daily and quarterly value levels are 5044 and 4671 with weekly and annual pivots at 5164 and 5179.
  • The Russell 2000 (808.66) Daily, annual and quarterly value levels are 797.08, 784.16 and 765.50 with weekly and monthly risky levels at 842.72 and 850.79. Semiannual value levels are 631.62 and 567.74.
  • The Philadelphia Semiconductor Index (SOX) (422.91) My daily value level is 420.512 with monthly, weekly, and quarterly risky levels at 453.89, 462.98 and 465.93. Semiannual and annual value levels are 296.89, 270.98 and 259.30.
The FHFA reports another decline in home prices. According to the Federal Housing Finance Agency Monthly House Price Index home prices declined 0.3% in January with a year over year decline of 3.9%. This index tracks the purchase prices of houses backed by mortgages sold or guaranteed by Fannie Mae (OTCQB:FNMA) and Freddie Mac (OTCQB:FMCC). I have been predicting lower home prices.
Click to enlarge
(Click to enlarge)
Click to enlarge
(Click to enlarge)
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.