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Look For Choppy Trading In May Around New Monthly Levels.

|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 9,351 down 1.78% on the day. The Hang Seng was closed at 21,094. European exchanges were lower on Monday with the DAX and CAC 40 closed on Thursday. The FTSE 100 ended Monday at 5,738 - down 0.19% on the day, and is up slightly this morning. The DAX ended Monday at 6,761 - down 0.59% on the day. The CAC 40 ended Monday at 3,213 - down 1.64% on the day. The yield on the 10-Year US Treasury continues to press against my semiannual pivot at 1.903. Gold is trying to move higher but seems to be reluctant to take out the 50-day simple moving average at $1678.2 and the 200-day simple moving average at $1697.8. Crude oil has been influenced by my semiannual pivot at $104.84 and its 50-day simple moving average at $105.17. The euro versus the dollar is above its 50-day simple moving average at 1.3210. Dow Transports and Russell 2000 are below their 2011 all time highs at 5627.85 and 868.57, and Dow Transports, S&P 500 and NASDAQ are below their March 2012 highs at 13,289.08, 1419.15 and 3134.17.

Today's Four in Four Key Levels:
 

  1. Yields - The yield on the 10-Year US Treasury is on the cusp of my semiannual pivot at 1.903 with 50-day / 200-day SMAs at 2.079 / 2.082 and this month's risky level at 1.734.
  2. Commodities - Gold is above my semiannual pivots at $1635.8 and $1659.4 with the 50-day below the 200-day at $1679.2 and $1697.8. Crude oil is trading around my semiannual pivot at $104.84 with the 50-day SMA at $105.17.
  3. Currencies - The euro versus the dollar remains above my semiannual value level at 1.2980 with my weekly pivot at 1.3180 and quarterly risky level at 1.3366.
  4. Equities - My overall neutral zone is between my annual pivot at 1363.2 on the S&P 500 and 836.15 on the Russell 2000. Quarterly value levels are 1337.7 SPX and 2911 NASDAQ with quarterly pivots at 12,794 Dow Industrials and 829.34 Russell 2000, and quarterly risky level at 5420 on Dow Transports. New monthly risky levels / pivots are 13,354 Dow Industrials, 1397.0 S&P 500, 3041 NASDAQ, 5385 Dow Transports and 813.56 Russell 2000. This week's pivots / risky levels are 13,210 Dow Industrials, 1415.8 SPX, 3120 NASDAQ, 5336 Dow Transports, and 836.88 Russell 2000. 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.
  5. ValuEngine Valuations - Stocks remains reasonably priced fundamentally with 59.5% of all stocks undervalued with six undervalued sectors and ten overvalued sectors. Aerospace is 10.8% UV, Computers & Technology 12.1% OV, Finance 11.0% OV, Medical 14.3% OV, and Retail-Wholesale 13.9% OV.

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