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Transports and Russell 2000 Closed Below their 21-Day Simple Moving Averages

|Includes: DIA, GLD, iShares 20+ Year Treasury Bond ETF (TLT)
The daily charts for the major equity averages have mixed MOJO readings and closes relative to their 21-day simple moving averages at 12,500 Dow Industrials, 1324.45 S&P 500, 2803 NASDAQ, 2364 NASDAQ 100 (NDX), 5413 Dow Transports, 832.57 Russell 2000, and 402.65 Philadelphia Semiconductor Index (SOX). The Transports and Russell 2000 are below their 21-day SMAs. The yield on the 10-Year US Treasury note declined to 2.940 as a modest flight to quality trumped the risk of a downgrade by the credit agencies. Gold set a new all time high this morning at $1625.8 below my semiannual and quarterly risky levels at $1644.8 and $1655.8. Crude oil failed again around my annual pivots at $99.91 and $101.92. The euro versus the dollar moved above 1.4500 on Tuesday.
 
10-Year Note – (2.953) Quarterly, semiannual and monthly value levels are 3.053, 3.791 and 3.832 with a daily pivot at 2.948, and weekly and annual risky levels at 2.885 and 2.690. The July trading range is between the July 1st high at 3.223 and the July 12th low at 2.814.
 
Courtesy of Thomson / Reuters
 
Comex Gold – ($1619.9) Weekly, monthly and semiannual value levels are $1563.3, $1547.9 and $1469.9 with a daily pivot at $1620.9, and semiannual and quarterly risky levels at $1644.8 and $1655.8.
 
Courtesy of Thomson / Reuters
 
Nymex Crude Oil ($99.55) My weekly value level is $93.07 with annual pivots at $99.91 and $101.92 and daily, quarterly and semiannual risky levels at $101.14, $102.40 and $103.92.
 
 
Courtesy of Thomson / Reuters
 
The Euro – (1.4509) My monthly and quarterly value levels are 1.4133 and 1.3728 with daily and weekly pivots at 1.4475 and 1.4403 and semiannual risky levels at 1.4752 and 1.4872.
 
Courtesy of Thomson / Reuters
 
Daily Dow: (12,501) The daily chart is neutral with declining MOJO and daily closes above the 21-day simple moving average at 12,500. The weekly chart stays positive on weekly closes above the five-week modified moving average at 12,434. My weekly and annual value levels are 12,253 and 11,491 with a daily risky level at 12,680, the May 2nd high at 12,876, and monthly, quarterly and annual risky levels at 13,155, 13,839 and 13,890.
 
Courtesy of Thomson / Reuters
 
S&P 500 (1331.9) The weekly chart stays positive given weekly closes above the five-week modified moving average (MMA) at 1320.6. The daily chart stays positive given daily closes above the 21-day simple moving average at 1324.5. Weekly, annual and semiannual value levels are 1291.3, 1210.7, 981.3 and 855.7 with a daily risky level at 1349.9, the May 2nd high at 1370.58, and monthly, quarterly and annual risky levels at 1422.8, 1467.0 and 1562.9.
 
NASDAQ (2840) The weekly chart stays positive with weekly closes above the five-week MMA at 2784. The daily chart stays positive given daily closes above the 21-day simple moving average at 2803. Weekly, annual and semiannual value levels are 2721, 2335 and 2199 with a daily risky level at 2884, the May 2nd high at 2887.75, monthly, quarterly and annual risky levels at 2975, 3109 and 3243.
 
NASDAQ 100 (NDX) (2429) The weekly chart stays positive with weekly closes above the five-week MMA at 2345. The daily chart stays positive with daily closes above the 21-day simple moving average at 2364. Set a new multi-year high at 2437.42 on Monday. Weekly, semiannual and annual value levels are 2310, 1951, 1861 and 1723 with a daily risky level at 2476, and monthly, annual and quarterly risky levels at 2483, 2590 and 2630.
 
Dow Transports (5342) The weekly chart stays positive with weekly closes above the five-week MMA at 5369. The daily chart stays negative with daily closes below the 21-day simple moving average at 5413. Weekly, annual and semiannual value levels are 5247, 5179, 4335 with a daily pivot at 5378, the July 7th high at 5627.85, and monthly, quarterly and annual risky levels at 5736, 6112 and 6131.
 
Russell 2000 (824.83) The weekly chart stays with weekly closes above the five-week MMA at 827.50. The daily chart stays negative with daily closes below the 21-day simple moving average at 832.57. Weekly, annual and semiannual value levels are 802.02, 784.16, 577.47 and 530.04 with a daily risky level at 837.98, the May 2nd high at 868.57, and quarterly and annual risky levels at 924.95, 930.83 and 978.58.
 
The SOX– (406.47) The weekly chart shifts to positive on weekly closes above the five-week MMA at 409.55. The daily chart stays positive with daily closes above the 21-day simple moving average at 402.65. Weekly, annual and semiannual value levels are 399.15, 376.27, 270.98, 258.97 and 204.67 with a daily risky level at 410.17, the May 2nd high at 450.79, and monthly, quarterly and annual risky levels at 482.54, 493.22 and 531.14.
 
Equity Fundamentals – Fairly Valued but not cheap!
  • 54.7% of all stocks are undervalued / 45.3% of all stocks are overvalued
  • Nine sectors are undervalued but only Construction is more than 5% undervalued
  • Seven sectors are overvalued – Oils-Energy by 5.8%, and Utilities by 6.0%
  • P/E Ratios – Range from 21.5 times for Aerospace to 58.7 times for Oils-Energy.
 
Definition of MOJO – This is my term for technical momentum. I use what’s called “12x3x3 slow stochastic readings” from daily, weekly and monthly charts. The scale is zero to 10.0 where above 8.0 is overbought and below 2.0 is oversold.
 
Richard Suttmeier
Chief Market Strategist
ValuEngine.com
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