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On the Cusp of a Dow Theory Buy Signal

|Includes: DIA, DUG, GLD, iShares 20+ Year Treasury Bond ETF (TLT)
US stocks had solid gains last week with the Dow Industrial Average up 156 points to 12,377. The Dow traded above its February 18th high at 12,391.29 on Friday, but did not close above that level and thus a Dow Theory Buy Signal has been delayed.
 
Tracking Dow Theory - The Dow Transports ended March with a daily close above its February 17th closing high at 5298.10 and ended the week at 5370. The Dow Industrial Average needs to close above its February 18th closing high at 12,391.25 to confirm a Dow Theory Buy Signal.
 
Courtesy of Thomson / Reuters
 
Stocks Remain Overvalued Fundamentally – We are operating under a ValuEngine Valuation Watch with more than 60% of all stocks overvalued. At Friday’s close 62.5% of all stocks were overvalued. In addition all 16 sectors are overvalued with 12 by double-digit percentages. A ValuEngine Valuation Warning occurs when more than 65% of all stocks are overvalued. This last occurred at the mid-February highs.
 
10-Year Note – (3.446) Daily, annual and quarterly value levels are 3.530, 3.796 and 4.016 with weekly, monthly, annual, and semiannual risky levels at 3.275, 3.181, 2.690, 2.441, and 2.322. The weekly chart favors lower yields over the near term given weekly closes below the 200-week simple moving average at 3.554. This is the dividing line between supply and inflation fears versus the potential flight to quality.
 
Comex Gold – ($1428.2) Annual, semiannual and annual value levels are $1356.5, $1300.6 and $1187.2 with a daily pivot at 1428.8, and semiannual, weekly, quarterly and monthly risky levels at $1452.6, $1473.0, $1523.7 and $1559.9. The weekly chart is positive but we need a weekly close above my semiannual risky level at $1452.6 to target the new quarterly and monthly risky levels at $1523.7 and $1559.9.
 
Nymex Crude Oil ($108.19) My annual and monthly value levels are $101.92, $101.09 and $99.91 with daily and semiannual pivots at $106.62 and $107.14, and weekly and quarterly risky levels at $110.68, $114.27 and $120.52. The weekly chart is positive, and holding my semiannual pivot at 107.14 targets quarterly risky levels at $114.27 and $120.52.
 
 
The Euro – (1.4226) Daily and quarterly value levels are 1.4083 and 1.3401 with a monthly pivot at 1.4170, and quarterly and weekly risky levels at 1.4308 and 1.4328. The weekly chart is overbought.
 
Weekly Dow: (12,377) The weekly chart shows flat MOJO and is thus neutral. We need a weekly close above my monthly risky level at 12,481 to indicate upside potential to my quarterly and annual risky levels at 13,774 and 13,890. Otherwise there is risk to my annual value level at 11,491.
 
Key Levels for the Other Major Equity Averages
 
S&P 500 (1332.4) My weekly pivot is 1328.1 with daily and monthly risky levels at 1343.9 and 1360.0. My quarterly value level is 1277.7.
 
NASDAQ (2790) My weekly pivot is 2762 with daily and monthly risky levels at 2828 and 2898.
 
NASDAQ 100 (NDX) (2343) My weekly pivot is 2328.6 with daily, monthly, annual and quarterly risky levels at 2384, 2477, 2590 and 2685. 
 
Dow Utilities (415.80) My semiannual value level is 397.84 with daily and weekly pivots at 415.08 and 412.49 and monthly and quarterly risky levels at 423.25 and 448.17.
 
Dow Transports (5370) My annual, weekly, monthly and daily pivots are 5179, 5341, 5371 and 5406.  
 
Russell 2000 (846.77) Annual and quarterly value levels are 784.16 and 778.81 with weekly, daily and monthly risky levels at 848.50, 853.76 and 856.67.
 
The SOX– (432.85) My weekly pivot is 427.31 with daily, monthly, quarterly and annual risky levels at 448.83, 452.34, 498.75 and 531.14.
 
That’s today’s Four in Four. Have a great day.
  
Richard Suttmeier
Chief Market Strategist
ValuEngine.com
(800) 381-5576
 
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As Chief Market Strategist at ValuEngine Inc, my research is published regularly on the website www.ValuEngine.com. 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 to http://www.valuengine.com/nl/mainnl to review sample issues and find out more about my research.
 
“I Hold No Positions in the Stocks I Cover.”