When I made my bullish call on October 4th ValuEngine showed that 93.5% of all stocks were undervalued. We end the month with only 71.1% of all stocks undervalued. Fifteen of Sixteen sectors are undervalued but none by more than 18.2% (Medical) and with Utilities slightly overvalued. Technical MOJO has taken over, which means that the Dow Industrial Average can trade up to my quarterly risky level at 12,507, but I predict that the Dow will not trade above its May 2nd high of 12,876. The major equity averages have positive weekly charts favoring additional upside. The weekly chart for the yield on the 10-Year US Treasury favors higher yields given a close above my semiannual pivot at 2.414 which was tested last week. My quarterly and annual value levels are 2.669 and 2.690. This is a sign that the Fed’s “operation twist” has failed. Let’s see what Bernanke has to say Wednesday afternoon!
10-Year Note – (2.313) Semiannual, quarterly and annual value levels are 2.414, 2.669 and 2.690 with daily and monthly pivots at 2.280 and 2.222, and weekly, and semiannual risky levels at 2.191 and 1.672, which was tested on September 23rd.
Courtesy of Thomson / Reuters
Comex Gold – ($1746.00) Daily, semiannual, weekly, semiannual and annual value levels are $1719.0, $1644.8, $1537.5, $1469.9 and $1,356.5 with my quarterly pivot at $1738.4 and monthly risky level at $1811.4, and the September 6th all time high at $1923.7.
Courtesy of Thomson / Reuters
Nymex Crude Oil – ($93.45) The October 4th year-to-date low is $74.95 with my weekly value level at $86.38, a daily pivot at $93.01, and monthly, quarterly and annual risky levels at $98.51, $100.34, $99.91 and $101.92.
The Euro – (1.4154) Weekly, and quarterly value levels are 1.3319 and 1.2598 with a daily pivot at 1.4159, and monthly and semiannual risky levels at 1.4579, 1.4752 and 1.4872.
Weekly Dow: (12,231) The 200-week simple moving average is 10,628 with the five-week modified moving average at 11,570, weekly and annual value levels at 11,694 and 11,491, and quarterly and annual risky levels at 12,507 and 13,890. The weekly chart stays positive with a weekly close above the 5-week MMA and with rising MOJO.
S&P 500 – (1285.1) The October 4th YTD low is 1074.77 with weekly and annual value levels at 1231.9 and 1210.7, a daily pivot at 1273.2, and quarterly and annual risky levels at 1303.7 and 1562.9. The YTD high is 1370.58.
NASDAQ – (2737) The October 4th YTD low is 2298.89 with my annual value level at 2335, daily and weekly value levels at 2685 and 2686, and quarterly risky level at 2807, and the YTD high at 2887.75. My annual risky level is 3243.
NASDAQ 100 (NDX) – (2401) The YTD low is 2034.92 with a daily value level at 2350, a weekly pivot at 2394 and quarterly risky level at 2440, the YTD high at 2437.42 and annual risky level at 2590.
Dow Transports – (5012) The October 4th YTD low is 3950.66 with weekly, semiannual value levels at 4739, 4335 and 3868, a daily pivot at 5014, and annual and quarterly risky levels at 5179 and 5359, and the YTD high at 5627.85.
Russell 2000 – (761.01) The October 4th YTD low is 601.71 with daily and weekly value levels at 750.08 and 713.93, and annual and quarterly risky levels at 784.16 and 802.96, and the YTD high at 868.57.
The SOX– (396.33) The October 4th YTD low is 322.24 with a daily value level at 384.91, a weekly pivot at 398.86, and quarterly risky level at 417.63, and the YTD high at 450.79.
Equity Fundamentals – Stocks are extremely undervalued.
- 71.1% of all stocks are undervalued / 28.9% of all stocks are overvalued. On October 4th 93.5% of all stocks were undervalued.
- Fifteen of sixteen sectors are undervalued, only eleven by double-digit percentages. None are undervalued by more than 20%. Utilities are slightly overvalued. 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.
Chief Market Strategist
Chief Market Strategist
To unsubscribe from this free email newsletter list, please click http://www.valuengine.com/pub/Unsubscribe?
Send your comments and questions to Rsuttmeier@Gmail.com. For more information on our products and services visit www.ValuEngine.com
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.”