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Equities meet Risky Levels with < 80% of all stocks undervalued.

|Includes: DIA, GLD, QQQ, SPY, iShares 20+ Year Treasury Bond ETF (TLT)
Looking at the daily charts for the major equity averages we continue to see overbought MOJO with the 50-day simple moving averages as supports at: 11,269 Dow Industrials, 1180.8 SPX, 2527 NASDAQ, 2226 NDX, 4476 Dow Transports, 686.01 Russell 2000, and 358.00 SOX. Stocks are well above these moving average supports and above my annual pivots at 11,491 Dow and 1210.7 SPX. The 200-day simple moving averages are resistances / pivots as some averages tested these milestones at: 11,968 Dow Industrials, 1274.5 SPX, 2692 NASDAQ, 2295 NDX, 5027 Dow Transports, 779.83 Russell 2000 and 407.99 SOX. The yield on the 10-Year US Treasury is above its 50-day at 2.057. Gold is below its 50-day at $1739.6. Crude oil came within pennies of testing its 200-day at $94.78. The euro is between its 50-day and 200-day at 1.3864 and 1.4093.
 
10-Year Note – (2.114) Semiannual, quarterly and annual value levels are 2.414, 2.669 and 2.690 with daily and monthly pivots at 2.180 and 2.222, the 50-day simple moving average at 2.057, and weekly, and semiannual risky levels at 1.915 and 1.672, which was tested on September 23rd.
 
Courtesy of Thomson / Reuters
 
Comex Gold – ($1703.1) Daily, semiannual, weekly, semiannual and annual value levels are $1660.6, $1644.8, $1606.4, $1469.9 and $1,356.5 with quarterly and monthly risky levels at $1738.4 and $1811.4, and the September 6th all time high at $1923.7. The 200-day simple moving average is $1550.3 with the 50-day at $1739.6.
 
Courtesy of Thomson / Reuters
 
Nymex Crude Oil ($92.80) The October 4th year-to-date low is $74.95 with my weekly value level at $84.81, a daily pivot at $93.02, the 50-day at $85.45 with the 200-day at $94.78, and monthly, quarterly and annual risky levels at $98.51, $100.34, $99.91 and $101.92.
 
 
Courtesy of Thomson / Reuters
 
The Euro – (1.3903) Weekly, and quarterly value levels are 1.2966 and 1.2598 with a daily pivot at 1.3878, and monthly and semiannual risky levels at 1.4579, 1.4752 and 1.4872. The 50-day simple moving average is 1.3864 with the 200-day at 1.4093.
 
Courtesy of Thomson / Reuters
 
Daily Dow - (11,707) The October 4th YTD low is 10,404.49 with annual and weekly value levels at 11,491 and 11,336, a daily pivot at 11,811, and monthly and quarterly risky levels at 12,091 and 12,507 with the YTD high at 12,876.00. Semiannual value levels are 9,635 and 8,468. The 50-day is 11,269 with the 200-day at 11,968.
 
Courtesy of Thomson / Reuters
 
S&P 500 (1229.1) The October 4th YTD low is 1074.77 with semiannual value levels at 981.3 and 855.7, annual and weekly value levels at 1210.7 and 1194.0, and daily, monthly, quarterly and annual risky levels at 1246.7, 1259.8, 1303.7 and 1562.9. The YTD high is 1370.58.
 
NASDAQ (2638) The October 4th YTD low is 2298.89 with my annual value level at 2335, semiannual value levels at 2199 and 2049, a weekly pivot at 2607, and daily, monthly, and quarterly risky levels at 2659, 2680, and 2807, and the YTD high at 2887.75. My annual risky level is 3243.
 
NASDAQ 100 (NDX) (2336) The YTD low is 2034.92 with semiannual and annual value levels at 1951, 1861 and 1723, my monthly value level at 2312, a weekly pivot at 2334, and daily and quarterly risky levels at 2359 and 2440, the YTD high at 2437.42 and annual risky level at 2590.
 
Dow Transports (4793) The October 4th YTD low is 3950.66 with weekly, semiannual value levels at 4554, 4335 and 3868, and daily, monthly, annual and quarterly risky levels at 4878, 4980, 5179 and 5359, and the YTD high at 5627.85.
 
Russell 2000 (713.65) The October 4th YTD low is 601.71 with semiannual value levels at 577.47 and 530.04, a weekly value level at 677.48, and daily, monthly, annual and quarterly risky levels at 718.28, 778.77, 784.16 and 802.96, and the YTD high at 868.57.
 
The SOX– (377.46) The October 4th YTD low is 322.24 with annual and semiannual value levels at 270.98, 258.97 and 204.67, daily, weekly and monthly pivots at 373.50, 379.60 and 363.01, and quarterly risky level at 417.63, and the YTD high at 450.79.
 
Equity Fundamentals – Stocks are extremely undervalued.
  • 80.3% of all stocks are undervalued / 19.7% of all stocks are overvalued. On October 4th 93.5% of all stocks were undervalued.
  • All sixteen sectors are undervalued, fifteen by double-digit percentages, only four by 20.8% and 23.8%. 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
 
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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
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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.
 
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