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Higher Crude Oil Fuels 100 Point Drop In Dow Transports

|Includes: Apple Inc. (AAPL), DIA, GLD, QQQ, SPY, TLT
In 2011 Dow Transports set an all time high at 5627.85 on July 7th, but this year Transports are a drag as crude oil attempts to challenge my annual and semiannual risky levels at $103.58 and $104.84. Another dynamic is strength in tech stocks led by Apple (NASDAQ:AAPL), but after setting a new all time high at $526.29 the stock had a "key reversal". In my Forbes story on Monday I mentioned that Apple had a weekly pivot at $500.01 and I stated that on a breakout above $500 some will be looking to book profits. It's what I call; "The Power of the Pivot" where a pivot has an 85% chance of being tested during its time horizon. The S&P 500, Dow Transports and Russell 2000 remain below 2011 highs at 1370.58, 5627.85 and 868.57 respectively with the highs for Transports and small caps being all time highs. My overall neutral zone is between my quarterly value levels at 12,478 Dow Industrials, 1305.4 SPX and 2777 NASDAQ and quarterly / annual risky levels at 1363.2 S&P 500, 5448 Dow Transports and 836.15 Russell 2000. The yield on the 10-Year note is between its 50-day simple moving average at 1.938 and my semiannual pivot at 1.902. Gold is below my quarterly pivots at $1725.5 and $1740.9. Crude oil is above its quarterly pivot at $99.87. The euro vs the dollar is below its 50-day SMA at 1.3016.

10-Year Note - (1.931) My annual value is 2.502 with daily and weekly value levels at 1.989 and 2.038, and annual, quarterly and monthly risky levels are 1.903, 1.797, 1.687 and 1.347.

Courtesy of Thomson / Reuters

Comex Gold - ($1729.9) Semiannual, annual and weekly value levels are $1659.5, $1635.8, $1575.8, $1593.9 with daily, weekly and quarterly pivots at $1731.9, $1735.0, $1725.5 and $1740.9 and monthly risky level at $1816.4.

Courtesy of Thomson / Reuters

Nymex Crude Oil - ($102.06) Monthly and semiannual value levels are $85.62 and $79.83 with quarterly and daily pivots at $99.87 and $102.17, and weekly, semiannual and annual risky levels at $104.54, $104.84, and $103.58 and $117.00.

Courtesy of Thomson / Reuters

The Euro - (1.3066) Semiannual, weekly, monthly, and quarterly value levels are 1.2980, 1.2971, 1.2945, and 1.2499 with daily, and annual and semiannual risky levels at 1.3201, 1.4239 and 1.4405.

Courtesy of Thomson / Reuters

Daily Dow: (12,781) Quarterly, annual, monthly and semiannual value levels are 12,478, 12,312, 11,557, 8,425 and 8,336 with quarterly and pivot pivots at 12,796 and 12,830, and weekly and annual risky levels at 13,276 and 14,032.

Courtesy of Thomson / Reuters

S&P 500 - (1343.2) Monthly and semiannual value levels are 1176.1, 841.7 and 829.9 with daily and quarterly pivots at $1349.5, $1305.4 and $1331.7, and annual and weekly risky levels at 1363.2, 1391.9 and 1562.9. The May 2, 2011 high is 1370.58.

NASDAQ - (2916) Quarterly, annual, monthly and semiannual value levels are 2849, 2777, 2698, 2512, 2012 and 1952 with a daily pivot at 2927, and weekly and annual risky levels at 2984 and 3232.

NASDAQ 100 (NDX) - (2556) Quarterly, weekly, annual, monthly and semiannual value levels are 2471, 2422, 2412, 2300, 2280, 1851 and 1743 with daily, weekly and annual risky levels at 2576, 2610 and 2603.

Dow Transports - (5178) Monthly and semiannual value levels are 4522, 4407 and 3778 with a daily pivot at 5183, and weekly, quarterly, and annual risky levels at 5498, 5448, 5861 and 6111. The all time high was set at 5627.85 on July 11, 2011.

Russell 2000 - (813.94) Monthly and semiannual value levels are 662.90, 572.90 and 510.81 with daily and quarterly pivots at 812.41 and 824.46, and quarterly, weekly, and annual risky levels at 829.03, 843.28, 836.15 and 969.09. The all time high was set at 868.57 on May 2, 2011.

The SOX- (425.48) Quarterly, monthly, annual and semiannual value levels are 390.17, 323.52, 269.80, 277.90 and 194.47 with daily and quarterly pivots at 420.24 and 423.32, and weekly and annual risky levels at 444.44 and 520.61. The 2011 high is 474.33 set on February 18, 2011.

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  • 57.7% of all stocks are undervalued / 42.3% of all stocks are overvalued. Back on October 4th - 93.5% of all stocks were undervalued.
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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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As Chief Market Strategist at ValuEngine Inc, my research is published regularly on the website 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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