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The Dow Will Find a Top with a 12,000 Handle

The yield on the US Treasury 10-Year note has formed a trading range between 3.568 and 3.247 balanced by supply, fears of inflation and QE2 buying by the Federal Reserve. Comex gold declined as expected and now faces my semiannual value level at $1300.6. Nymex crude oil failed below its semiannual pivot at $87.52 as the $92.00 a barrel barrier proved to be resistance. The euro has become stronger than expected after holding 1.3225, but faces a daily risky level at 1.3828 today. Stocks are overvalued fundamentally and overbought technically. The Dow Industrial should find a top above 12,000 just as 14,000 was a barrier in October 2007.
10-Year Note – (3.385) Daily, weekly, annual and semiannual value levels are 3.438, 3.758, 3.791 and 4.268 with annual, semiannual and monthly risky levels are 2.690, 2.441, 2.322 and 2.150.
Comex Gold – ($1311.3) Semiannual and annual value levels are $1300.6 and $1187.2 with a daily pivot at $1319.2, quarterly and annual pivots at $1331.3 and $1356.5, and weekly, monthly, quarterly and semiannual risky levels at $1390.9, $1439.0, $1441.7 and $1452.6.
Nymex Crude Oil ($85.42) My monthly value level is $75.74 with daily and semiannual pivots at $84.80 and $87.52, and weekly, annual, semiannual and quarterly risky levels at $95.34, $99.91, $101.92, $107.14 and $110.87.
The Euro – (1.3725) Weekly, quarterly and monthly value levels are 1.3398, 1.3227 and 1.2805 with a daily risky level at 1.3828. Semiannual and annual risky levels are 1.4624, 1.4989, 1.6367 and 1.7312.
Daily Dow: (11,990)Annual, quarterly, semiannual, monthly and semiannual value levels are 11,491, 11,395, 10,959, 10,427 and 9,449 with daily, weekly and annual risky levels at 12,053, 12,162 and 13,890.
Stocks remain overvalued fundamentally according to ValuEngine with all 16 sectors overvalued and only 35.6% of all stocks undervalued. This follows last week’s ValuEngine Valuation Warning last week, which will renew if less than 35% of stocks are undervalued.
All major averages are extremely overbought on there weekly charts and my Proprietary Analytics show weekly risky levels at 12,162 Dow, 1333.9 S&P 500, 2805 NASDAQ, 5321 Dow Transports, and 828.86 Russell 2000. There is an 85% chance that the Dow will decline to my annual pivot at 11,491 at some point in 2011.
That’s today’s Four in Four. Have a great day.
Richard Suttmeier
Chief Market Strategist, (800) 381-5576
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As Chief Market Strategist at ValuEngine Inc, my research is published regularly on the website I have daily, weekly, monthly, and quarterly newsletters available that track a variety of equity and other data parameters as well as my most up-to-date analysis of world markets. My newest products include a weekly ETF newsletter as well as the ValuTrader Model Portfolio newsletter. You can go HERE to review sample issues and find out more about my research.
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