All five major averages ended last week below their five-week modified moving averages at 16210 Dow Industrials, 1843.1 S&P 500, 4163 Nasdaq, 7433 Dow Transports and 1154.55 Russell 2000. All have declining 12x3x3 weekly slow stochastics so all have negative weekly chart profiles simultaneously. I believe this is a serious warning for stocks, more than confirming a correction.
A week ago Dow Industrials, the S&P 500 and Dow Transports set all-time intraday highs and it is historically unusual for these highs to be confirmed by weekly closes just one week later. In my opinion the reason for this is how quickly the momentum in the Nasdaq and Russell 2000 changed direction following multiyear and all-time intraday highs set a month before.
Markets are powered by stocks with strong technical momentum and when the associated bubbles pop it's a drag on all stocks and markets.
A part of this message occurs when the markets that Wall Street tells investors to avoid outperform and that has been the case as U.S. bond yields decline instead of rise and as Dow Utilities becomes the year-to-date leader up 8.9% year-to-date at Friday's close.
The next confirmation of a significant market top comes given weekly closes below semiannual pivots and value levels at 1764.4 S&P 500, 3920 Nasdaq and 7245 Dow Transports. To pull the market out of this potential Dow Industrials needs to close back above its semiannual pivot at 16245 with the Russell 2000 above its semiannual pivot at 1133.29.
My market call for 2014 has been that all five major averages would trade down to at least their 200-day simple moving averages now at 15747 Dow Industrials, 1761.4 S&P 500, 3936 Nasdaq, 6970 Dow Transports and 1105.35 Russell 200 which was nearly tested on Friday.
The week's risky levels are 16298 Dow Industrials, 1858.1 S&P 500, 4137 Nasdaq, 7579 Dow Transports and 1173,94 Russell 2000.
The downside risk in 2014 is to annual value levels at 14835 and 13467 Dow Industrials, 1539.1 and 1442.1 S&P 500, 3471 and 3063 Nasdaq, 6249 and 5935 on Dow Transports and 966.72 and 879.39 on Russell 2000.
Dow Industrials: (16027) Annual value levels are 14835 and 13467 with semiannual and monthly pivots at 16245 and 16297, a quarterly risky level at 16462, the April 4 all-time intraday high at 16631.63 and semiannual risky level at 16860.
S&P 500 - (1815.7) Semiannual and annual value levels are 1797.3, 1764.4, 1539.1 and 1442.1 with quarterly and weekly risky levels at 1853.5 and 1858.1, the April 4 all-time intraday high at 1897.28, and a monthly risky level at 1895.6.
NASDAQ - (4000) Daily, semiannual and annual value levels are 3970, 3930, 3920, 3471 and 3063 with a weekly risky level at 4137, the March 6 multiyear intraday high at 4371.71 and monthly risky level at 4446.
NASDAQ 100 (NDX) - (3447) Quarterly and annual value levels are 3424, 3078 and 2669 with semiannual pivots at 3456 and 3458, a weekly risky level at 3524, the March 6 multiyear intraday high at 3738.32, and monthly risky levels at 3834.
Dow Transports - (7362) Semiannual, and annual value levels are 7245, 6249 and 5935 with semiannual and quarterly pivots at 7376 and 7407, a weekly risky level at 7579, the April 3 all-time intraday high at 7715.91 and monthly risky level at 7812.
Russell 2000 - (1111.44) Annual value levels are 966.72 and 879.39 with semiannual pivots at 1133.29 and 1130.29, a quarterly pivot at 1169.22, weekly and monthly risky levels at 1173.9 and 1211.52 and the March 4 all-time intraday high at 1212.82.
The SOX - (560.34) Semiannual, quarterly and annual value levels are 548.36, 507.19, 490.52, 371.58 and 337.74 with a daily pivot at 560.25, weekly and monthly risky levels at 579.05 and 581.64 and the April 3 multiyear intraday high at 601.40.
Dow Utilities: (534.32) Quarterly, semiannual, monthly and annual value levels are 528.10, 524.37, 504.74, 502.03 and 497.53 with a weekly pivot at 531.06 and daily, semiannual and annual risky levels at 537.31, 542.83 and 548.70.
The yield on the US Treasury 10-Year note (2.619%) is below the convergence of its 21-day, 50-day and 200-day SMAs at 2.714%, 2.707% and 2.721%. The weekly chart is neutral with its five-week MMA at 2.707% and its 200-week SMA at 2.409%.
The yield on the US Treasury 30-Year bond (3.476%) is below its 21-day, 50-day and 200-day SMAs at 3.581%, 3.628% and 3.719% setting a 2014 low at 3.472%. The weekly chart shows the bond yield below its five-week MMA at 3.600% and its 200-week SMA at 3.528%.
Comex Gold ($1319.0) is on the cusp of its 21-day SMA at $1315.7 and above the "golden cross" of the 50-day and 200-day SMAs at $1314.6 and $1297.5. The weekly chart is neutral with the five-week MMA at $1312.4 and the 200-week SMA at $1494.7. The golden cross continues the in a tug-of-war with the neutral weekly chart.
Nymex Crude Oil ($103.74) is above its converged 21-day, 50-day and 200-day SMAs at $100.59, $100.66 and $100.71. The weekly chart is positive with its five-week MMA at $101.01 and its 200-week SMA at $93.86.
The Euro (1.3885) is above its 21-day SMA, 50-day SMA and 200-day SMAs at 1.3810, 1.3756 and 1.3548. The weekly chart is neutral with its five-week MMA at 1.3776 and its 200-week SMA at 1.3362.
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Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.