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Stocks are Cheap According to ValuEngine as Bear Roars

|Includes: DIA, GLD, iShares 20+ Year Treasury Bond ETF (TLT)
For the Dow Industrial Average the 200-week and 120-month simple moving averages are supports at 10,742 and 10,570 versus Monday’s low at 10,809.85. Monday’s weakness put the S&P 500 below its 200-week and 120-month SMAs at 1155.8 and 1162.3. Longer term the downside risks are to my semiannual value levels for the Dow at 9,635 and 8,468 and for the S&P at 981.3 and 855.7. For the NASDAQ my annual value level is 2335. I do not project help from my weekly projections anytime soon. In US Treasuries a flight to quality trumped the S&P Credit downgrade, but this will be put to a test the next three days with auctions of $32 billion 3-Year notes Tuesday, $24 billion 10-Year notes on Wednesday and $16 billion 30-Year bonds on Thursday. An interesting read will be the Fed Statement after Tuesday’s FOMC meeting.
10-Year Note – (2.340) Annual, weekly, quarterly, monthly and annual value levels are 2.690, 2.762, 3.053, 3.556 and 3.791 with my semiannual pivot at 2.414 and daily risky level at 2.219. My semiannual risky level is 1.672. This yield tested 2.268 overnight.
Courtesy of Thomson / Reuters
Comex Gold – ($1718.9) Quarterly, semiannual, weekly and monthly value levels are $1655.8, $1644.8, $1626.5 and $1604.1 with a daily pivot at $1704.0 and Monday’s new all time high at $1721.8. We had another new all time high at $1780.9 overnight.
Courtesy of Thomson / Reuters
Nymex Crude Oil ($80.25) I show no value levels with the 200-week simple moving average at $83.97, daily and weekly pivots at $82.12 and $88.12, my annual pivots at $99.91 and $101.92 and quarterly and semiannual risky levels at $102.40 and $103.92. Traded as low as $75.71 overnight.
Courtesy of Thomson / Reuters
The Euro – (1.4182) My quarterly value level is 1.3728 with daily and weekly pivots at 1.4133 and 1.4256 and semiannual risky level at 1.4752. The euro stayed range-bound.
Courtesy of Thomson / Reuters
Daily Dow: (10,810) The 200-week and 120-month simple moving averages are 10,742 and 10,570 with daily and annual pivots at 10,970 and 11,491, the five-week modified moving average at 12,189, and weekly risky level at 12,353. Semiannual value levels are 9,635 and 8,468. Overnight weakness most likely had the Dow testing or below the 200-week and 120-month.
Courtesy of Thomson / Reuters
S&P 500 (1119.5) Is below the 200-week and 120-month simple moving averages are 1155.8 and 1162.6 with a daily risky level at 1146.8, my annual pivot at 1210.7 and weekly risky level at 1301.4. Semiannual value levels are 981.3 and 855.7.
NASDAQ (2358) My annual value level is 2335 with daily and weekly risky levels at 2443 and 2782.
NASDAQ 100 (NDX) (2060) My semiannual value levels are 1951 and 1861 with daily and weekly risky levels at 2125 and 2382.
Dow Transports (4364) Semiannual value levels are 4335 and 3868 with daily, annual and weekly, risky levels at 4474, 5179 and 5342.
Russell 2000 (651.05) Semiannual value levels are 577.47 and 530.04 with daily, annual and weekly risky levels at 682.27, 784.16 and 813.59.
The SOX– (331.33) My annual value level is 270.98 daily and weekly risky levels at 339.79 and 374.90.
Equity Fundamentals – Stocks are cheap and nearing the Valuations of March 2009
  • 88.6% of all stocks are undervalued / 11.4% of all stocks are overvalued
  • All sixteen sectors are undervalued by double-digit percentages
  • P/E Ratios – Range from 15.0 times for Auto-Tires-Trucks to 43.4 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
(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 to to review sample issues and find out more about my research.
“I Hold No Positions in the Stocks I Cover.”