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Stocks Stabilize With The S&P 500 Above Its Annual Pivot At 1363.2

|Includes: DIA, GLD, QQQ, SPY, iShares 20+ Year Treasury Bond ETF (TLT), XLE

Markets in Review: Asian stocks were higher on Friday. The Nikkei 225 ended their session at 9,637 - up 1.19% on the day. The Hang Seng ended their session at 20,661 - up 1.64% on the day. European stocks were higher on Thursday, but opened lower on Friday. The yield on the 10-Year US Treasury is below its 50-day simple moving average at 2.078. On Thursday we learned that Initial Jobless Claims rose to 380,000 staying above the recessionary level at 350,000. Many say that when claims are below 400,000 it keys growth in the labor market. I have disagreed with that notion, and my case was solidified by the weak payroll numbers for March. The real recessionary threshold is 350,000. The rebound in Gold stayed below its 50-day and 200-day simple moving averages at $1696.4 and $1692.0, converging towards a "death cross". Strength in Crude oil tested its 50-day simple moving average at $104.22. The euro versus the dollar tested its 50-day simple moving average at 1.3212. Strength in the Dow Industrial Average stayed below its 50-day simple moving average at 12,991. The key for the weak is that the NASDAQ's tested an held 50-day simple moving average at 2997 on weakness Tuesday.

Today's Four in Four Key Levels:

  1. Yields - The yield on the 10-Year US Treasury is between its 50-day simple moving average at 2.078 and my semiannual pivot at 1.903.
  2. Commodities - Gold is above my semiannual pivots at $1659.4 and $1635.8, but below the 50-day and 200-day SMAs at $1696.4 and $1692.0. Crude oil is influenced by quarterly, annual and semiannual pivots at $101.55, $103.58 and $104.84 with my monthly value level at $97.55.
  3. Currencies - The euro versus the dollar remains between my semiannual value level at 1.2980 and its 50-day simple moving average at 1.3212.
  4. Equities - My quarterly value levels are 1337.7 SPX and 2911 NASDAQ with a quarterly pivot at 12,794 Dow Industrials and quarterly risky levels at 5420 Dow Transports and 829.34 Russell 2000. My annual pivots remain at 1363.2 SPX and 836.15 on the Russell 2000. My prediction remains that Transports and Russell 2000 will stay below their 2011 all time highs at 5627.85 on July 7th and 868.57 on May 2nd. Closes today below the five-week modified moving averages would be negative; 12,987 Dow Industrials, 1376.4 SPX, 2999 NASDAQ, 5232 Dow Transports, and 816.31 Russell 2000.
  5. ValuEngine Valuations - Stocks are reasonably priced with 59.2% of all stocks undervalued with six undervalued sectors and ten overvalued sectors. Aerospace is 11.3% UV with Computer & Technology 14.1% OV, Financial 10.7% OV, Medical 18.0% OV, and Retail-Wholesale is 13.1% OV.

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