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I have been tracking the 2011 Santa Claus Rally and the S&P 500 joined the Dow Industrials and Dow Transports with a close on Friday above its 200-day simple moving average at 1259.2. The NASDAQ closed between its 50-day and 200-day SMAs at 2617 and 2661. The 200-day SMA for the Russell 2000 remains a barrier at 763.49. Since the May / July period the major averages have seen lower highs. The Russell 2000 set a new all time high at 868.57on May 2nd. The Dow Transports reached an all time high at 5627.85 on July 7th. This makes me believe that this Santa Claus Rally is a bear market correction. The yield on the 10-Year US Treasury tested its 50-day SMA at 2.038 on Friday. Gold continues to have a tough time getting back above its 200-day SMA at $1620.0. Crude oil remains above its 50-day and 200-day SMAs at $95.75 and $95.74 confirming a bullish crossover, and has returned to its annual pivots at $99.91 and $101.92 for the final week of 2011. The euro remains oversold which is a stock rally negative.

10-Year Note – (2.021) Semiannual, quarterly and annual value levels are 2.414, 2.669 and 2.690 with the 50-day simple moving average at 2.038, daily and weekly risky levels at 1.903 and 1.700, and semiannual and monthly risky levels at 1.672 and 1.602.

Courtesy of Thomson / Reuters

Comex Gold – ($1608.7) Daily, semiannual and annual value levels are $1565.9, $1469.9 and $1,356.5 with the 200-day at $1620.0, weekly and semiannual pivots at $1639.5 and $1644.8, and quarterly and monthly risky levels at $1738.4 and $1873.8, and the September 6th all time high at $1923.7. The year’s low was $1535.0 set on September 26th.

Courtesy of Thomson / Reuters

Nymex Crude Oil – ($99.82) The October 4th year-to-date low is $74.95 with daily and monthly value levels at $93.66 and $86.20, the 50-day and 200-day simple moving averages at $95.75 and $95.74, quarterly and annual pivots at $100.34, $99.91 and $101.92, and weekly and semiannual risky levels at $102.49, $103.93 and $107.90. The high and low for oil happened on the same days as the Dow with the high at $114.83 per barrel on May 2nd.

Courtesy of Thomson / Reuters

The Euro – (1.3040) Quarterly and weekly value levels are 1.2598 and 1.2545 with a daily pivot at 1.3031, the 50-day simple moving average at 1.3505, and monthly and semiannual risky levels at 1.3953, 1.4752 and 1.4872.

Courtesy of Thomson / Reuters

Daily Dow: (12,294) The 200-day simple moving average is 11,938 with the 50-day at 11,877. Daily, monthly, weekly, annual, and semiannual value levels are 12,111, 11,794, 11,730, 11,491, 9,635 and 8,468 with quarterly and annual risky levels at 12,507 and 13,890. The October 4th low was 10,404.49 with the May 2nd high at 12,876.00.

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Courtesy of Thomson / Reuters

S&P 500 – (1265.3) The October 4th YTD low is 1074.77 with daily, monthly, annual and weekly value levels at 1245.9, 1211.8, 1210.7 and 1190.7, semiannual value levels at 981.3 and 855.7, and quarterly and annual risky levels at 1303.7 and 1562.9. The YTD high is 1370.58. You can see the lower highs since May 2nd, but you can also see the breakout above the 200-day SMA / intermediate down trend at 1259.2.

Courtesy of Thomson / Reuters

NASDAQ – (2619) The October 4th YTD low is 2298.89 with monthly, daily, weekly and annual value levels at 2588, 2571, 2473 and 2335, semiannual value levels at 2199 and 2049, and quarterly risky level at 2807, and the YTD high at 2887.75. My annual risky level is 3243.

NASDAQ 100 (NDX) – (2288) The YTD low is 2034.92 with daily and weekly value levels at 2240 and 2166, a monthly pivot at 2282, semiannual value levels at 1951 and 1861, a quarterly risky level at 2440, the YTD high at 2437.42, and my annual risky level at 2590.

Dow Transports – (5053) The October 4th YTD low is 3950.66 with daily, weekly, monthly and semiannual value levels at 5032, 4806, 4752, 4335 and 3868, and annual and quarterly risky levels at 5179 and 5359, and the YTD high / all time high at 5627.85 set on July 7th.

Russell 2000 – (747.96) The October 4th YTD low is 601.71 with daily, weekly and monthly value levels at 743.05, 700.13 and 695.30, semiannual value levels at 577.47 and 530.04, and annual and quarterly risky levels at 784.16 and 802.96, and the YTD high / all time high at 868.57 set on May 2nd.

The SOX– (368.62) The October 4th YTD low is 322.24 with daily, weekly and monthly value levels at 357.72, 345.61 and 346.01, an annual value level at 270.98, and quarterly risky level at 417.63, and the YTD high at 450.79.

Equity Fundamentals – Stocks remain fundamentally cheap.

  • 71.3% of all stocks are undervalued / 28.7% of all stocks are overvalued. On October 4th - 93.5% of all stocks were undervalued.
  • Seven sectors are undervalued and nine sectors are overvalued in a range from 13.5% undervalued to 11.7% overvalued. Back in March 2009 the sectors were undervalued by 33% to 45%.
Source: S&P 500 Moves Above Its 200-Day SMA At 1259.2