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The Major Equity Averages Straddle 200-Day Moving Averages.

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

Markets in Review: Asian stocks were lower on Friday. The Nikkei 225 ended Friday at 8,611 - down 2.99%. The Hang Seng ended Friday at 18,952 - down 1.30%. European exchanges were also lower on Friday. The FTSE 100 ended Friday at 5,267 - down 1.33%. The DAX ended Friday at 6,271 - down 0.60%. The CAC 40 ended Friday at 3,008 - down 0.13%. The yield on the 10-Year Treasury traded down to 1.692, approaching the September 23, 2011 low yield at 1.671. Gold traded as high as $1597.5 the Troy ounce to $1597.5 after holding my monthly value level at $1525.8 and taking out my annual pivot at $1575.8. Crude oil traded down to $90.93 per barrel well below its 200-day simple moving average at $96.24. The euro versus the dollar traded as low as 1.2646.

Today's Four in Four Key Levels:
 

  1. Yields - The yield on the 10-Year Treasury is below my semiannual pivot at 1.903 with a monthly pivot at 1.734, the Sept 23rd low yield at 1.671 and weekly risky level at 1.635.
  2. Commodities - Gold has a monthly value level at $1525.8 the Troy ounce with an annual pivot at $1575.8, a weekly pivot at $1596.6, and semiannual risky level at $1635.8. For Crude oil I show a weekly pivot at $91.62 with the 200-day SMA at $96.24.
  3. Currencies - The euro versus the dollar shows a monthly value level at 1.2257 with weekly and semiannual pivots at 1.2842 and 1.2980.
  4. Equities - The Dow Industrial Average is below weekly and quarterly pivots at 12,692 and 12,794 with my annual value level at 12,312 and the 200-day at 12,199. The S&P 500 is below weekly, quarterly and annual pivots at 1329.9, 1337.7 and 1363.2 with the 200-day at 1278.2. The NASDAQ is below my quarterly pivot at 2911 with the 200-day at 2742, and my annual value level at 2698. Dow Transports is down 2.9% YTD and closed Friday below its 200-day at 4931 with my semiannual value level at 4407 and weekly risky level at 5083. The Russell 2000 closed Friday below its 200-day at 753.20 with a semiannual value level at 572.90, and weekly risky level at 759.03. Another negative is that Transports and Small Caps, the leaders in 2011, are the first to fall below 200-day SMAs.
  5. ValuEngine Valuations - Stocks remain cheap fundamentally with 77.6% 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 2.80%. Eleven sectors are undervalued with five overvalued. Autos-Tires-Trucks - 25.7% UV, Basic Materials - 22.4% UV, Oils-Energy - 16.0% UV, Business Services - 12.0% UV, and Consumer Discretionary - 11.3%.

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