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The lines in the sand are 11,491 Dow and 1210.7 S&P 500!

|Includes: DIA, GLD, QQQ, SPY, iShares 20+ Year Treasury Bond ETF (TLT)
Stocks remain fundamentally cheap, but not as cheap as they were at the October 4th lows. The daily technicals are positive and nearing overbought territory. The weekly technicals shift to positive on weekly closes above the five-week modified moving averages at: 11,218 Dow Industrials, 1175.0 SPX, 2511 NASDAQ, 2203 NDX, 4472 Dow Transports, 685.04 Russell 2000, and 358.05 SOX. We can have positive weekly charts, but if the closes are below 11,491 Dow and 1210.7 SPX the configuration could be a false signal. A weekly close above 2.116 on the 10-Year yield indicates risk to higher yields if the close is also above my monthly pivot at 2.222. Gold stays negative on its weekly chart with a Friday close below $1705.0. Oil stays negative on its weekly chart with a Friday close below $84.84. The euro versus the dollar stays negative on its weekly chart with a Friday close below 1.3774. It’s a close call today!
 
10-Year Note – (2.176) Semiannual, quarterly and annual value levels are 2.414, 2.669 and 2.690 with daily and monthly pivots at 2.155 and 2.222, the 50-day simple moving average at 2.074, and weekly, and semiannual risky levels at 1.776 and 1.672, which was tested on September 23rd.
 
Courtesy of Thomson / Reuters
 
Comex Gold – ($1669.3) Semiannual and annual value levels are $1469.9 and $1,356.5 with semiannual and daily pivots at $1644.8 and $1659.1, and quarterly, weekly and monthly risky levels at $1738.4, $1760.1 and $1811.4, and the September 6th all time high at $1923.7. The 200-day simple moving average is $1539.6 with the 50-day at $1750.6.
 
Courtesy of Thomson / Reuters
 
Nymex Crude Oil ($84.58) The October 4th year-to-date low is $74.95 with my weekly value level at $82.35, the 50-day at $84.87, the 200-week at $83.57, and daily, monthly, quarterly and annual risky levels at $89.35, $98.51, $100.34, $99.91 and $101.92.
 
 
Courtesy of Thomson / Reuters
 
The Euro – (1.3794) Weekly, and quarterly value levels are 1.3345 and 1.2598 with daily, monthly and semiannual risky levels at 1.3953, 1.4579, 1.4752 and 1.4872. The daily chart shows the 50-day simple moving average at 1.3938 trading below the 200-day at 1.4066 in what’s called a “Death Cross”.
 
Courtesy of Thomson / Reuters
 
Daily Dow - (11,478) The October 4th YTD low is 10,404.49 with the 200-week and 120-month simple moving averages at 10,650 and 10,609, my weekly value level at 10,894, the 50-day at 11,196, my annual pivot at 11,491, and daily, monthly and quarterly risky levels at 11,856, 12,091 and 12,507. Semiannual value levels are 9,635 and 8,468.
 
Courtesy of Thomson / Reuters
 
S&P 500 (1203.7) The October 4th YTD low is 1074.77 with semiannual value levels at 981.3 and 855.7, my weekly value level at 1137.5, the 50-day at 1172.0, my annual pivot at 1210.7, and daily, monthly, quarterly and annual risky levels at 1254.9, 1259.8, 1303.7 and 1562.9.
 
NASDAQ (2620) The October 4th YTD low is 2298.89 with my annual pivot at 2335, semiannual value levels at 2199 and 2049, my weekly value level at 2436, the 50-day at 2501, and daily, monthly, quarterly and annual risky levels at 2741, 2680, 2807 and 3243.
 
NASDAQ 100 (NDX) (2327) The YTD low is 2034.92 with semiannual and annual value levels at 1951, 1861 and 1723, my weekly value levels at 2171, the 50-day and 200-day at 2195 and 2292, my monthly pivot at 2312, and daily, quarterly and annual risky levels at 2419, 2440 and 2590.
 
Dow Transports (4588) The October 4th YTD low is 3950.66 with my semiannual value level at 3868, semiannual and weekly value levels at 4335 and 4108, the 50-day at 4451, and daily, monthly, annual and quarterly risky levels at 4896, 4980, 5179 and 5359.
 
Russell 2000 (698.81) The October 4th YTD low is 601.71 with semiannual value levels are 577.47 and 530.04, my weekly value level at 641.17, the 50-day at 683.69, and daily, monthly, annual and quarterly risky levels at 747.93, 778.77, 784.16 and 802.96.
 
The SOX– (376.60) The October 4th YTD low is 322.24 with annual and semiannual value levels at 270.98, 258.97 and 204.67, my weekly value level at 345.74, my monthly pivot at 363.01, the 50-day at 353.95, and daily and quarterly risky levels at 397.58 and 417.63.
 
Equity Fundamentals – Stocks are extremely undervalued.
  • 83.0% of all stocks are undervalued / 17.0% of all stocks are overvalued. In March 2009 we saw 91.1% of all stocks undervalued.
  • All sixteen sectors are undervalued, fifteen by double-digit percentages, but only eight by 20.2% to 26.3, as the 30-Year bond yield starts to rise putting a drag on valuations. Back in March 2009 the sectors were undervalued by 33% to 45%. – Check out and subscribe to www.ValuEngine.com.
 
VE Morning Briefing – If you want expanded analysis of the US Capital Markets including a Fearless Prediction of the Week and a Stock of the Day go to this link and sign up: http://www.valuengine.com/nl/mainnl?nl=D
 
ValuTrader Model Portfolio – If you want to learn how to “Buy and Trade” use this link and sign up: http://www.valuengine.com/nl/mainnl?nl=V
 
ETF Weekly – If you want my Value Levels and Risky Levels for 30 Electronically Traded Funds use this link and sign up: http://www.valuengine.com/nl/mainnl?nl=U
 
ValuEngine FDIC Evaluation Report – In this report I slice and dice the FDIC Quarterly Banking Profile. We publish a ValuEngine List of Problem Banks in this publication: http://www.valuengine.com/nl/mainnl?nl=C
 
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.
 
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.”