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Deteriorating Technicals for the Major Equity Averages

|Includes: DIA, GLD, QQQ, SPY, iShares 20+ Year Treasury Bond ETF (TLT)
The Dow Industrials and Dow Transports still have positive weekly chart profiles, but all of the other major averages closed Friday below their five-week modified moving averages, which shifts those weekly charts to neutral. The five-week MMAs are: 11,765 Dow Industrials, 1227.4 SPX, 2618 NASDAQ, 4782 Dow Transports, and 721.45 Russell 2000. This makes it harder for the monthly chart profiles to remain neutral versus the five-month MMAs at: 11,791 Dow Industrials, 1247.1 SPX, 2642 NASDAQ, 4895 Dow Transports, and 753.70 Russell 2000. The daily charts ended Friday negative with all major averages below their 200-day SMAs. The yield on the 10-Year US Treasury trades around my monthly pivot at 1.963. Gold slipped below my quarterly pivot at $1738.4. Crude oil failed to stay above my annual pivots at $99.91 and $101.92. The euro vs the dollar remains has a negative weekly chart profile.
 
10-Year Note – (2.009) Weekly, semiannual, quarterly and annual value levels are 2.351, 2.414, 2.669 and 2.690 with daily and monthly pivots at 2.036 and 1.963, and semiannual risky level at 1.672.
 
Courtesy of Thomson / Reuters
 
Comex Gold – ($1723.4) Semiannual, weekly, semiannual and annual value levels are $1644.8, $1588.6, $1469.9 and $1,356.5 with daily and quarterly pivots at $1729.1 and $1738.4, and weekly and monthly risky levels at $1759.4 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 ($97.41) The October 4th year-to-date low is $74.95 with my monthly value level at $95.67, daily, weekly, quarterly, monthly and annual pivots at $99.88, $101.68, $100.34, $99.91 and $101.92, and semiannual risky levels at $103.93 and $107.90. 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 – (1.3515) Daily and quarterly value levels are 1.3276 and 1.2598 with weekly, monthly and semiannual risky levels at 1.3883, 1.4568, 1.4752 and 1.4872.
 
Courtesy of Thomson / Reuters
 
Weekly Dow: (11,796) My daily and annual value levels are 11,668 and 11.491 with a monthly pivot at 11,928, and quarterly, weekly and annual risky levels at 12,507, 12,658 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 (1215.7) The October 4th YTD low is 1074.77 with a daily value level at 1196.7, my annual pivot at 1210.7, a monthly pivot at 1229.3, and quarterly, weekly and annual risky levels at 1303.7, 1304.3 and 1562.9. The YTD high is 1370.58. My annual risky level is 1562.9.
 
NASDAQ (2573) The October 4th YTD low is 2298.89 with daily and annual value levels at 2526 and 2335, my monthly pivot at 2636, and weekly and quarterly risky levels at 2727 and 2807, and the YTD high at 2887.75. My annual risky level is 3243.
 
NASDAQ 100 (NDX) (2254) The YTD low is 2034.92 with a daily value level at 2221, a monthly pivot at 2294, and weekly and quarterly risky levels at 2387 and 2440, the YTD high at 2437.42, and my annual risky level at 2590.
 
Dow Transports (4841) The October 4th YTD low is 3950.66 with a daily value level at 4787, my semiannual value levels at 4335 and 3868, my monthly pivot at 5034, and annual, weekly and quarterly risky levels at 5179, 5256 and 5359, and the YTD high / all time high at 5627.85 on July 7th.
 
Russell 2000 (719.40) The October 4th YTD low is 601.71 with a daily value level at 700.93, my monthly pivot at 739.80, and weekly, annual and quarterly risky levels at 773.36, 784.16 and 802.96, and the YTD high / all time high at 868.57 on May 2nd.
 
The SOX– (371.25) The October 4th YTD low is 322.24 with a daily pivot at 369.12, my monthly value level at 339.47, and weekly and quarterly risky level at 389.03 and 417.63, and the YTD high at 450.79.
 
Equity Fundamentals – Stocks are extremely undervalued.
  • 81.2% of all stocks are undervalued / 18.8% 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. Four are undervalued by 22.0% to 25.8%. Back in March 2009 the sectors were undervalued by 33% to 45%. – Check out and subscribe to www.ValuEngine.com.
 
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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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