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Tracking Dow Theory and Fibonacci on the S&P 500

|Includes: DIA, DUG, GLD, iShares 20+ Year Treasury Bond ETF (TLT)
The yield on the 10-Year touched 3.054 on Friday, but held below the 200-day simple moving average at 3.090. The morning the 10-Year yield is back below my annual pivot at 2.999 as Bernanke says QE2 may exceed $600 billion if necessary to boost the economy. Can Congress impeach the Fed Chief? If Gold holds my new weekly pivot at $1400.5 the precious metal can reach my monthly risky level at $1443.5. Crude oil is above my new weekly pivot at $86.30 with semiannual and annual risky levels at $96.53 and $97.29. The euro returned to my quarterly pivot at 1.3318, but is below that magnet this morning. A close on the Dow Industrials above its November 5th high at 11,444.08 generates another Dow Theory Buy Signal. A close above 1228.74 SPX violates the 61.8% Fibonacci Retracement of the decline from October 2007 into March 2009. Stocks are getting more expensive as MOJO takes over the upside.
10-Year Note – (3.030) Weekly and semiannual value levels are 3.142 and 3.479 with daily and annual pivots at 3.015 and 2.999, and annual risky level at 2.813, and quarterly, semiannual and monthly risky levels at 2.265, 2.249 and 1.949.
Courtesy of Thomson / Reuters
Comex Gold – ($1415.3) Quarterly, semiannual and annual value levels are $1306.4, $1260.8, $1218.7 and $1115.2 with daily and weekly pivots at $1405.1 and $1400.5, and monthly risky level at $1443.5.
Courtesy of Thomson / Reuters
Nymex Crude Oil ($89.35) Semiannual, annual and monthly value levels are $83.94, $77.05 and $75.50 with weekly and daily pivots at 86.30 and $90.01, and semiannual and annual risky levels at $96.53 and $97.29.  
Courtesy of Thomson / Reuters
The Euro – (1.3411) Daily and monthly value levels are 1.2808 and 1.2500 with quarterly and weekly pivots at 1.3318 and 1.3473, and semiannual risky level at 1.4733.
Courtesy of Thomson / Reuters
Weekly Dow:(11,382) Weekly MOJO remains overbought. The five-week modified moving average is 11,132 with the 200-week simple moving average at 10,936. My annual and semiannual pivots are 11,235 and 11,296 with a weekly risky level at 11,440. Semiannual, annual and monthly value levels are 10,558, 10,379 and 10,325. 
Courtesy of Thomson / Reuters
Stocks are no longer cheap according to
At ValuEngine we show fourteen of sixteen sectors overvalued with Construction at 1.2% undervalued and Medical at 5.4% undervalued. There are four sectors overvalued by more than 10%; Auto-Tires-Trucks by 12.2%, Basic Industrial by 24.5%, Multi-Sector Conglomerates by 12.5% and Oils-Energy by 23.7%. The ValuEngine universe of stocks shows 42.6% undervalued and 57.4% overvalued for the first time since 2007. Only 20.2% of stocks are undervalued by 20% or more, while 26.2% are overvalued by more than 20%.
That’s today’s Four in Four. Have a great day.
Richard Suttmeier
Chief Market Strategist
(800) 381-5576
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