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The Undervalued, Oversold Dow held Moving Average Supports

|Includes: DIA, GLD, iShares 20+ Year Treasury Bond ETF (TLT)
The intra-day low for the Dow Industrial Average following the Fed Statement on Tuesday was 10,604.07 so the Dow held its 200-week and 120-month simple moving averages at 10,742 and 10,570. The NASDAQ held my annual value level is 2335. The US Treasury 10-Year note reached another year-to-date low yield at 2.038. Gold reached another all time high at $1782.5. Crude oil tested a new year-to-date low at $75.71. Fundamentally ValuEngine shows that 84.4% of all stocks are undervalued, the most since March 2009 with all sixteen sectors undervalued, fifteen by double-digit percentages between 8.3% and 25.6%. On Tuesday I added six Dow components to the ValuTrader model portfolio on market weakness.
 
10-Year Note – (2.275) Semiannual, annual, weekly, quarterly, monthly and annual value levels are 2.414, 2.690, 2.762, 3.053, 3.556 and 3.791 with a daily risky level at 2.076. My semiannual risky level is 1.672. This yield tested 2.038 Tuesday. The FOMC in announcing that the 0 to 0.25% funds rate will last at least through mid-2013 pushed yields down. There’s a 10-Year note auction today.
 
Courtesy of Thomson / Reuters
 
Comex Gold – ($1740.7) Quarterly, semiannual, weekly and monthly value levels are $1655.8, $1644.8, $1626.5 and $1604.1 with a daily pivot at $1735.5 and Tuesday’s new all time high at $1782.5.
 
Courtesy of Thomson / Reuters
 
Nymex Crude Oil ($80.46) I show no value levels with the 200-week simple moving average at $83.97, daily and weekly pivots at $78.67 and $88.12, my annual pivots at $99.91 and $101.92 and quarterly and semiannual risky levels at $102.40 and $103.92. Tuesday’s low was $75.71.
 
 
Courtesy of Thomson / Reuters
 
The Euro – (1.4338) My quarterly value level is 1.3728 with daily and weekly pivots at 1.4222 and 1.4256 and semiannual risky level at 1.4752.
 
Courtesy of Thomson / Reuters
 
Daily Dow: (11,240) The 200-week and 120-month simple moving averages are 10,742 and 10,570 with a daily pivot at 10,906, my annual pivot at 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.
 
Courtesy of Thomson / Reuters
 
S&P 500 (1172.5) My daily value level is 1134.3 with my annual pivot at 1210.7 and weekly risky level at 1301.4. Semiannual value levels are 981.3 and 855.7.
 
NASDAQ (2483) Daily and annual value levels are 2406 and 2335 with weekly risky level at 2782.
 
NASDAQ 100 (NDX) (2161) Daily and semiannual value levels are 2096, 1951 and 1861 with weekly risky level at 2382.
 
Dow Transports (4561) Daily and semiannual value levels are 4384 and 4335 with annual and weekly risky levels at 5179 and 5342.
 
Russell 2000 (696.16) Daily and semiannual value levels are 670.55, 577.47 and 530.04 with annual and weekly risky levels at 784.16 and 813.59.
 
The SOX– (346.69) Daily and annual value levels are 334.1 and 270.98 with weekly risky level at 374.90.
 
Equity Fundamentals – Stocks are cheap
  • 84.4% of all stocks are undervalued / 15.6% of all stocks are overvalued
  • All sixteen sectors are undervalued, fifteen by double-digit percentages
  • P/E Ratios – Range from 15.7 times for Auto-Tires-Trucks to 45.0 times for Oils-Energy.
 
Fed Policy - The Federal Reserve said it will likely keep the 0 – 0.25% funds rate into mid-2013, acknowledging the economy is weaker than it had thought and faces increasing risks. This should keep US Treasury yields low, and limit the rebound in stocks during this bear market.
 
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
(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.”