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Gold Is Operating Under A “Death Cross” Increasing Downside Risks

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

Markets in Review: Asian stocks closed higher on Wednesday. The Nikkei 225 ended their session at 9,667 - up 2.14% on the day. The Hang Seng ended their session at 20,762 - up 0.97% on the day. European stocks continued higher on Tuesday, but are opened slightly lower this morning. The FTSE 100 ended Tuesday at 5,767 - up 1.78% on the day. The DAX ended Tuesday at 6,801 - up 2.65% on the day. The CAC 40 ended Tuesday at 3,293 - up 2.72% on the day. The yield on the 10-Year US Treasury is just above 2.000% this morning below its 50-day and 200-day simple moving averages at 2.084 and 2.121. Housing Starts declined 5.8% in March to an annual rate of 654,000 units. Industrial Production was flat in March with Capacity Utilization down slightly to 78.6%. Gold declined to $1635.2 the Troy ounce on Tuesday holding my semiannual pivot at $1635.8. Gold is just below my second semiannual pivot at $1658.4 this morning below its 50-day and 200-day simple moving averages at $1690.9 and $1694.2 with the 50-day below the 200-day for the first time since February 12, 2009, confirming a "death cross". Crude oil traded up to $105.07 per barrel, but is just below its 50-day simple moving average at $104.62 this morning. The euro versus the dollar rose from 1.3093 to 1.3168 on Tuesday below its 50-day simple moving average at 1.3205.

Today's Four in Four Key Levels:
 

  1. Yields - The yield on the 10-Year US Treasury is still between its 50-day simple moving average at 2.084 and my semiannual pivot at 1.903.
  2. Commodities - Gold is trading between my semiannual pivots at $1635.8 and $1659.4, but below the 50-day / 20-day SMA "Death Cross" at $1690.9 and 1694.2. Crude oil remains 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 1.3205.
  4. Equities - Stocks rebounded on Tuesday and the major averages are back straddling their 50-day simple moving averages at; above 13,003 Dow Industrials, above 1377.5 SPX, above 3006 NASDAQ, above 5228 Dow Transports and below 820.05 Russell 2000. The major averages also straddle weekly pivots / risky levels at; above 13,088 Dow Industrials, below 1406.5 SPX, below 3103 NASDAQ, above 5196 Dow Transports and above 804.11 SPX. The keys for the week is the NASDAQ closing above or below its five-week MMA at 3003. A weekly close on the S&P 500 below my annual pivot at 1363.2 would be another negative for stocks.
  5. ValuEngine Valuations - Stocks are reasonably priced with 59.6% of all stocks undervalued with six undervalued sectors and ten overvalued sectors. Aerospace is 10.9% UV with Computer & Technology 13.5% OV, Finance 10.7% OV, Medical 13.3% OV, and Retail-Wholesale is 13.5% OV.

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