Markets in Review: The yield on the 10-Year US Treasury traded as low as 1.837 at 9:00 PM Sunday evening in reaction to surprise election results in Greece and France, which are against the austerity programs. Gold declined to $1634.8 for yet another test of my semiannual pivot at $1635.8 the Troy ounce. Crude oil traded down to $95.34 per barrel below its 200-day simple moving average at $96.31. The euro versus the dollar tested my semiannual value level at 1.2980. S&P Futures and NASDAQ 100 Futures were trading with a decline of about 1.0%.
Today's Four in Four Key Levels:
- Yields - The yield on the 10-Year US Treasury is trading between my semiannual pivot at 1.903 and this month's risky level at 1.734.
- Commodities - Gold remains under the influence of my semiannual pivots at $1635.8 and $1659.4. My weekly value level is $1590.0 with the 50-day at $1665.5. Crude oil shows a semiannual value level at $79.83 with a weekly pivot at $98.72 and quarterly, semiannual and annual pivots at $101.55, $104.84 and $103.58.
- Currencies - The euro versus the dollar is trading around my semiannual pivot at 1.2980. My monthly value level lags at 1.2257 with weekly and quarterly risky levels at 1.3232 and 1.3366.
- Equities - All major averages ended last week with declining MOJO on their weekly charts. The Dow Industrials was the only one that did not close below its five-week modified moving average at 13,033 missing by only five points. Another down week gets all major averages negative on their weekly charts. A weekly close below my annual pivot at 1363.2 shifts the US stock market to negative. The initial downside on Dow Industrials is to quarterly and annual value levels at 12,794 and 12,312. For the NASDAQ quarterly and annual value levels are 2911 and 2698. I do not have a specific downside targets for the S&P 500, Dow Transports or Russell 2000. My prediction remains that Dow Transports and Russell 2000 will not return to their lag 2011 all time highs at 5627.85 set on July 7th and 868.57 set on May 2nd in 2012.
- ValuEngine Valuations - Stocks remains reasonably priced fundamentally with 64.3% of all stocks undervalued with six undervalued sectors and ten overvalued sectors. Aerospace is 13.5% UV, Autos-Tires-Trucks 11.3% UV, Basic Industries 10.0% UV, Medical 12.4% OV, and Retail-Wholesale 11.4% OV.
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