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Dow / SPX breakout must be followed by the lagging indices.

|Includes: DIA, GLD, iShares 20+ Year Treasury Bond ETF (TLT)
With the closes in August above my annual pivots at 11,491 Dow and 1210.7 SPX the upside is to annual risky levels at 5179 Dow Transports and 784.16 Russell 2000. The Dow Industrial Average is now up on the year by 0.3%, but Transports is down 8.6%, Russell 2000 is down 7.3%, the SOX is down 13.6% and the Regional Banking Index (BKX) is down 23.5%. A weekly close below 11,491 Dow and 1210.7 SPX indicates a false breakout as the weekly charts stay negative if Friday’s closes are below the five-week modified moving averages at 11,675 Dow Industrials, 1227.7 SPX, 2590 NASDAQ, 4826 Dow Transports and 741.80 Russell 2000. A false breakout indicates risk back to my annual pivot at 2335 on NASDAQ. Note that all monthly charts are overbought with a negative divergence in MOJO except the SOX, which is negative and below its 120-month SMA at 403.12.
 
10-Year Note – (2.232) The monthly chart shows a double bottom around the 2.00% mark in December 2008 and August 2011. Daily, semiannual, annual, monthly and quarterly value levels are 2.348, 2.414, 2.690, 2.715 and 3.053 with weekly and semiannual risky levels at 1.914 and 1.672.
 
Courtesy of Thomson / Reuters
 
Comex Gold – ($1827.7) The monthly chart shows that the parabolic bubble remains in play. Daily, monthly, quarterly and semiannual value levels are $1785.1, $1702.3, $1655.8 and $1644.8 with my weekly risky level at $1907.5.
 
Courtesy of Thomson / Reuters
 
Nymex Crude Oil ($88.89) A negative monthly chart reflects a weakening economy indicating risk to the 120-month simple moving average at $61.37. The 200-week SMA is $83.85 with a weekly pivot at $86.56, my daily risky level at $90.63, the 50-day / 200 day death cross at $91.68 and $95.20, my annual pivots at $99.91 and $101.92 and quarterly, semiannual and monthly risky levels at $102.40, $103.92 and $104.23.
 
 
Courtesy of Thomson / Reuters
 
The Euro – (1.4367) The monthly chart show a trading range between 1.20 and 1.60. Weekly and quarterly value levels are 1.4153 and 1.3728 with daily, semiannual and monthly risky levels at 1.4447, 1.4752, 1.4872 and 1.5164.
 
Courtesy of Thomson / Reuters
 
Monthly: (11,614) The monthly chart remains overbought, but note the negative divergence and that weakness held the 120-month simple moving average at 10,575. My weekly value level is 10,987 with the 200-week and 120-month simple moving averages at 10,716 and 10,575, my annual pivot at 11,491, and daily and monthly risky levels at 11,874 and 12,779. Semiannual value levels are 9,635 and 8,468 with the 50-day and 200-day simple moving average death cross at 11,915 and 11.993, and quarterly and annual risky levels at 13,839 and 13,890.
 
Courtesy of Thomson / Reuters
 
S&P 500 (1218.9) Weekly and Semiannual value levels are 1135.9, 981.3 and 855.7 with my annual pivot at 1210.7, daily and monthly risky levels at 1245.5 and 1342.1, the 50-day and 200-day SMAs death cross at 1256.16 and 1283.89 and quarterly and annual risky levels are 1467.0 and 1562.9.
 
NASDAQ (2579) Weekly, annual and semiannual value levels are 2430, 2335, 2199 and 2049 with daily and monthly risky levels at 2648 and 2827, the 50-day and 200-day SMAs death cross at 2655 and 2704, and quarterly and annual risky levels at 3109 and 3243.
 
NASDAQ 100 (NDX) (2241) Weekly, semiannual and annual value levels are 2148, 1951, 1861 and 1723 with daily and monthly risky levels at 2302 and 2431, the 50-day and 200-day SMAs death cross at 2269 and 2285, and annual risky level at 2590.
 
Dow Transports (4667) Semiannual, weekly, and semiannual value levels are 4335, 4221 and 3868 with daily, annual and monthly risky levels at 4770, 5179 and 5190, and the 50-day and 200-day SMAs death cross at 5004 and 5135.
 
Russell 2000 (726.74) Weekly and semiannual value levels are 663.88, 577.47 and 530.04 with daily, annual and monthly risky levels at 748.17, 784.16 and 825.19 and the 50-day and 200-day SMAs death cross at 769.31 and 794.96.
 
The SOX– (355.79) Weekly, annual and semiannual value levels are 319.35, 270.98, 258.97 and 204.67 with daily and monthly risky levels at 369.48 and 418.07, the 50-day and 200-day SMAs death cross at 377.97 and 416.49 and quarterly and annual risky levels at 493.22 and 531.14.
 
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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.
 
Buy and Trade Strategies for Long Positions
  • Value Level – The price at which you establish an additional long position on share price weakness. This is done on a GTC Limit Order to buy weakness to the Value Level.
  • Risky Level – The price at which you remove a single long position or reduce a multiple long position on share price strength. This is done on a GTC Limit Order to sell strength to the Risky Level.
 
Buy and Trade Strategies for Short Positions
  • Value Level – The price at which you remove a single short position or reduce a multiple short position on share price weakness. This is done on a GTC Limit Order to buy weakness to the Value Level.
  • Risky Level – The price at which you establish an addition short position on share price strength. This is done on a GTC Limit Order to sell strength to the Risky Level.
 
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