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Small Caps Are Back Above 836.15 For The Third Monday In A Row.

|Includes: DIA, GLD, QQQ, SPY, iShares 20+ Year Treasury Bond ETF (TLT), XLE
Markets in Review: Asian stocks were mixed on Tuesday. The Nikkei 225 ended their session at 10,050 - down 0.59% on the day. The Hang Seng ended their session at 20,791 - up 1.31% on the day. European stocks were higher on Monday despite EU recession fears. The FTSE 100 ended their session at 5,875 - up 2.31% on the day. The DAX ended their session at 7,057 - up 1.58% on the day. The CAC 40 ended their session at 3,463 - up 1.14% on the day. The yield on the 10-Year US Treasury declined from 2.254 percent to 2.162 on Monday versus its 200-day simple moving average at 2.178. Nonmanufacturing ISM came in at 53.4 in March with prices paid elevated at 61.0. Construction Spending fell 1.1% in February the largest decline since July 2011. Gold rebounded from $1664.4 the Troy ounce to $1685.4 staying below its 200-day simple moving average at $1686.2. Crude oil declined from $103.58 per barrel to $102.06 then rose to $105.49 back above its 50-day simple moving average at $103.56. The euro versus the dollar declined from 1.3378 to 1.3282 staying above the 50-day simple moving average at 1.3211. The Dow Industrial Average declined to 13,153.69 then rebounded to a new 52-week high at 13,297.11. The NASDAQ's traded down to 3079.78 then rebounded to 3123.03 shy of its 52-week high at 3134.17 set on March 27th.

Today's Four in Four Key Levels:

  1. Yields - The yield on the 10-Year US Treasury should continue to trade between my annual value level at 2.502 and semiannual risky level at 1.903 around the 200-day simple moving average at 2.180.
  2. Commodities - Gold is influenced by a semiannual pivot at $1635.8, which has been a strong magnet year to date. A weekly close below $1635.8 indicates risk to my annual value level at $1575.8. The 200-day simple moving average remains a barrier at $1686.3. Crude oil should remain above my new quarterly value level at $101.55 as my annual and semiannual pivots at $103.58 and $104.84 provide stabilizing forces.
  3. Currencies - The euro versus the dollar remains above its 50-day simple moving average at 1.3212 with this week's pivot at 1.3345.
  4. Equities - New quarterly value levels are 12,794 Dow Industrials, 1337.7 SPX and 2911 NASDAQ. My quarterly and annual pivots are 829.34 Q / 836.15 A on the Russell 2000 and 1363.2 A SPX. My quarterly risky level is 5420 on Dow Transports. We can still see new 52-week highs for Industrials, S&P 500 and NASDAQ, but my prediction remains that Dow Transports and Russell 2000 will continue to lag 2011 all time highs at 5627.85 set on July 7th and 868.57 set on May 2nd.

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