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The “Power Of The Pivot” Continues As Levels Are Tested.

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

Markets in Review: Asian stocks were mixed on Thursday. The Nikkei 225 did not trade. The Hang Seng ended their session at 21,250 - down 0.28% on the day. European exchanges are higher at 7:00 AM after mixed closes on Wednesday. The FTSE 100 ended their session at 5,758 - down 0.93% on the day. The DAX ended their session at 6,711 - down 0.75% on the day. The CAC 40 ended their session at 3,226 - up 0.42% on the day. The yield on the 10-Year US Treasury tested my semiannual pivot at 1.903 again on Wednesday. Gold declined to $1641.0 the Troy ounce this morning still below the 50-day and 200-day simple moving averages at $1671/0 and $1698.6. Crude oil declined to $104.66 per barrel this morning back below its 50-day simple moving average at $105.19. The euro versus the dollar traded as low as 1.3126 this morning below its 50-day simple moving average at 1.3204. The Dow Industrial Average traded to a year-to-date high at 13,338.66 set on May 1st. The NASDAQ is still below its March 27th high at 3134.17.

Today's Four in Four Key Levels:
 

  1. Yields - Traders and investors had yet another opportunity to sell the 10-Year US Treasury at my semiannual pivot at 1.903 on Wednesday.
  2. Commodities - Gold is between my semiannual pivots at $1635.8 and $1659.4. Crude oil remains influenced by my semiannual pivot at $104.84.
  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 - The choppy trading continued on Wednesday. The Dow Industrials is between my weekly pivot at 13,210 and May's risky level at 13,354. The S&P 500 is between my monthly pivot at 1397.0 and weekly risky level at 1415.8. The NASDAQ traded between my monthly pivot at 3041 and weekly risky level at 3120. Dow Transports traded up to between weekly and monthly risky levels at 5336 and 5386, well below its July 7, 2011 all time high at 5627.85. The Russell 2000 stabilized under the influence of my monthly pivot at 813.56 and quarterly risky level at 829.34. The small cap index is well below its all time high of 868.57 set a year ago today.
  5. ValuEngine Valuations - Stocks remains reasonably priced fundamentally with 59.1% of all stocks undervalued with six undervalued sectors and ten overvalued sectors. Aerospace is 10.8% UV, Computers & Technology 12.4% OV, Finance 11.1% OV, Medical 18.3% OV, and Retail-Wholesale 14.7% OV.

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