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Oversold Conditions On Daily Charts For All US Capital Markets

|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 ended their session at 8,877 - up 0.86% on the day. The Hang Seng ended their session at 19,201 - down 0.31% on the day. European exchanges are lower this morning after ending Wednesday mixed. The FTSE 100 ended Wednesday at 5,405 - down 0.60%. The DAX ended Wednesday at 6,384 - down 0.26%. The CAC 40 ended Wednesday at 3,049 - up 0.31%. The yield on the 10-Year US Treasury declined to another YTD low at 1.747 percent on Wednesday versus the cycle low at 1.671 set on September 23, 2011. Gold traded down to a new year to date low of $1526.7 the Troy ounce on Wednesday versus my monthly value level at $1525.8. Crude oil traded down to $91.81 per barrel on Wednesday. The euro versus the dollar traded down to 1.2684. The decline in yields is overdone on its daily chart. Gold and Crude oil are oversold. The euro is oversold. All major averages are oversold.

Today's Four in Four Key Levels:

  1. Yields - The yield on the 10-Year US Treasury is below my semiannual pivot at 1.903 with monthly and weekly risky levels at 1.734 and 1.726. Declining yields is overdone.
  2. Commodities - Gold has a monthly value level at $1525.8 the Troy ounce with annual pivot at $1575.8 and weekly risky level at $1612.6. The "Death Cross" that signaled this down side began on April 17th. For Crude oil my semiannual value level is $79.83 with a weekly pivot at $95.76, and the 200-day SMA at $96.24. Both gold & crude are oversold.
  3. Currencies - The euro versus the dollar shows a monthly value level at 1.2257 with my semiannual pivot at 1.2980. The euro is oversold on its daily chart.
  4. Equities - The Dow Industrial Average is below my quarterly and weekly pivots at 12,794 and 12,798 with my annual value level at 12,312. The S&P 500 is below quarterly and annual pivots at 1337.7 and 1363.2. The NASDAQ is below my quarterly pivot at 2911 with my annual value level at 2698. Dow Transports stayed above my weekly value level at 5085. The Russell 2000 is below my weekly pivot at 786.76. 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 7, 2011 and 868.57 set on May 2, 2011 in 2012. All have oversold daily charts.
  5. ValuEngine Valuations - Stocks remain cheap fundamentally with 72.0% of all stocks undervalued, but keep in mind that on October 4th 93.5% were undervalued. A factor is the low 30-Year bond yield at 2.90%. Nine sectors are undervalued with 11 overvalued. Autos-Tires-Trucks - 22.5% UV, Basic Materials - 21.6% UV. Oils-Energy - 13.1% UV.

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