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Closes Versus Five-Week MMAs Key Next Week’s Markets

|Includes: DIA, GLD, QQQ, SPY, iShares 20+ Year Treasury Bond ETF (TLT)
The daily charts for the major equity averages have struggled to sustain gains above their 200-day simple moving averages focusing on 11,975 Dow Industrials and 2688 NASDAQ. Crude oil is above its 200-day at $95.05, but the euro versus the dollar is below its 50-day at 1.3725 as a tug-of-war for influence on stock prices. Gold declined before testing my monthly risky level at $1821.5. Closes above the five-week modified moving averages are positive, but below monthly pivots are a drag; 11,655 and 11,928 Dow Industrial Average, 1221.6 and 1229.3 SPX, 2615 and 2636 NASDAQ, 2300 and 2294 NDX, 4715 and 5034 Dow Transports, and 716.08 and 739.80 Russell 2000. Closes above all of these key levels keeps alive a move to my quarterly risky levels at 12,507 Dow Industrials, 1303.7 SPX, 2807 NASDAQ, 2440 NDX, 5179 A / 5359 Q Dow Transports, and 784.16 A / 802.96 Russell 2000. Mixed weekly closes leaves us with continued two-way volatility.
 
10-Year Note – (2.057) Weekly, semiannual, quarterly and annual value levels are 2.243, 2.414, 2.669 and 2.690 with my monthly pivot at 1.963, and daily and semiannual risky levels at 1.900 and 1.672.
 
Courtesy of Thomson / Reuters
 
Comex Gold – ($1760.3) Quarterly, semiannual, weekly, semiannual and annual value levels are $1738.4, $1644.8, $1543.5, $1469.9 and $1,356.5 with daily and monthly risky level at $1802.8 and $1821.50, and the September 6th all time high at $1923.7. The year’s low was $1535.0 set on September 26th.
 
Courtesy of Thomson / Reuters
 
Nymex Crude Oil ($97.68) The October 4th year-to-date low is $74.95 with my weekly value level at $87.64, daily and monthly pivots at $97.83 and $95.67, and quarterly and annual risky levels at $100.34, $99.91 and $101.92. The high and low for oil happened on the same days as the Dow with the high at $114.83 per barrel on May 2nd.
 
 
Courtesy of Thomson / Reuters
 
The Euro – (1.3602) My quarterly value level is 1.2598 with daily and weekly pivots at 1.3580 and 1.3789, and monthly and semiannual risky levels at 1.4568, 1.4752 and 1.4872.
 
Courtesy of Thomson / Reuters
 
Daily Dow: (11,894) My annual value level is 11,491 with daily and monthly pivots at 11,896 and 11,928, my weekly pivot at 12,108, and quarterly and annual risky levels at 12,507 and 13,890. The October 4th low was 10,404.49 with the May 2nd high at 12,876.00.
 
Courtesy of Thomson / Reuters
 
S&P 500 (1229.1) The October 4th YTD low is 1074.77 with annual value level at 1210.7, a daily pivot at 1239.2, my monthly at 1229.3, a weekly pivot at 1266.6, and quarterly and annual risky levels at 1303.7 and 1562.9. The YTD high is 1370.58. My annual risky level is 1562.9.
 
NASDAQ (2625) The October 4th YTD low is 2298.89 with my annual value level at 2335, my daily pivot at 2632, a monthly pivot at 2636, and weekly risky level at 2735, and quarterly risky level at 2807, and the YTD high at 2887.75. My annual risky level is 3243.
 
NASDAQ 100 (NDX) (2312) - The YTD low is 2034.92 with my monthly value level at 2294, a daily pivot at 2318 and weekly, and quarterly risky levels at 2431 and 2440, the YTD high at 2437.42 and annual risky level at 2590.
 
Dow Transports (4780) The October 4th YTD low is 3950.66 with a daily pivot at 4835, my weekly pivot at 4914, my monthly risky level at 5034, and annual and quarterly risky levels at 5179 and 5359, and the YTD high / all time high at 5627.85 on July 7th.
 
Russell 2000 (725.48) The October 4th YTD low is 601.71 with a daily pivot at 729.06, weekly and monthly pivots at 736.24 and 739.80, and annual and quarterly risky levels at 784.16 and 802.96, and the YTD high / all time high at 868.57 on May 2nd.
 
The SOX– (378.15) The October 4th YTD low is 322.24 with a monthly value level at 339.47, a daily pivot at 378.84, and weekly and quarterly risky levels at 400.41, 417.63, and the YTD high at 450.79.
 
Equity Fundamentals – Stocks are extremely undervalued.
  • 79.8% of all stocks are undervalued / 20.2% 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. Two are undervalued by 23.3% to 24.5%. Back in March 2009 the sectors were undervalued by 33% to 45%. – Check out and subscribe to www.ValuEngine.com.
 
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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
(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.”