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The Numerous Market Divergences Continue

|Includes: AAPL, AMZN, Burlington Northern Santa Fe Corp. (BNI), DUG, GOOG, GS, INTC, JPM, MSFT
Great earnings provided sell opportunities for several great names. Transports should see the same fate following Warren Buffett’s buy of Burlington Northern (BNI). The Dollar Index is bottoming, but Copper and Crude Oil disconnect staying above 200-week simple moving averages, while gold hits a new all time high. A look at the Ascending Wedge patterns for the Dow and S&P 500.
Great Earnings Reports – Stocks Top and Topple, and most price gaps were filled and then some.
Intel – Traded to $21.27 on 10/14, now $18.50.
Goldman Sachs – Traded to $193.60 on 10/14, now $171.61.
JP Morgan – Traded to $47.47 on 10/14, now $44.70.
Apple – Traded to $208.71 on 10/21, now $188.75.
Microsoft – Traded to $29.35 on 10/23, now $27.53, but gap not yet filled.
Google – Traded to $561.64 on 10/26, now $537.29.
Amazon – Traded to $125.68 on 10/26, now $118.37, but gap not filled yet.
As these stocks reached new 52-week highs, the major averages lagged. Even as these names were upgraded by Wall Street with raised price targets, ValuEngine found them overvalued.
While this was evolving the S&P 500 could not get above 1100.
Will Warren’s Burlington Northern keep other rails on the Express Track?
I don’t think so! Mr. Buffett is paying $100 bucks per share to own the rail line, which is well above ValuEngine’s fair value at $63.20. I say investors should book profits on the rails.
If Berkshire Hathaway owns BNI, does that mean that the company becomes private?
Did Warren just add to his Lionel Train Set?
The daily chart for the Dow Transports still shows the 21-day and 50-day simple moving averages as resistances at 3847 and 3833, which remain resistances.
The Dollar, Copper, Crude Oil and Gold oh my!
The weekly chart for the dollar index shifts to positive on a weekly close above the five-week modified moving average at 76.74.
The weekly chart shows copper flipping above the 200-week simple moving average at 294. MOJO still flirts with rolling over below 8.0. Weekly support is 286.19 with monthly resistance at 324.52.
The weekly chart for crude oil shows the 200-week simple moving average as support at $75.44. This week’s pivot is $79.17 with quarterly resistance at $83.16. My annual pivots remain at $68.81 and $66.51.
Gold reaches a new all time high of $1096.2 testing my quarterly resistance at $1094.4 with my semiannual resistance at $1101.9.
The Ascending Wedges for the Dow and S&P 500:
The weekly chart for the Dow is still overbought with MOJO at 8.2. A close this week below the five-week modified moving average at 9,700 shifts the weekly chart to negative. The Ascending Wedge support is at 9,592 with my annual pivot at 9,750 and annual resistance at 10,012.
The weekly chart for the S&P 500 shows that the Ascending Wedge has been broken to the downside with that chart level now a resistance at 1066. My annual supports are 967.1 and 910.8.
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That’s today’s Four in Four. Have a great day.
Richard Suttmeier
Chief Market Strategist
(800) 381-5576
As Chief Market Strategist at ValuEngine Inc, my research is published regularly on the website 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. I hope that you will go to and review some of the sample issues of my research.
“I Hold No Positions in the Stocks I Cover.”