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The Tangled Web in the US Capital Markets

|Includes: DIA, DUG, GLD, iShares 20+ Year Treasury Bond ETF (TLT)
If you are in the bond bubble camp the trading range for the 10-Year US Treasury yield is between my annual pivot at 2.999 and my semiannual risky level at 2.249. Gold failed to reach a new high this week stopped by my semiannual and monthly pivots at $1260.8 and $1263.8. Crude oil continues to trade between its August 25th low at $70.76 and my annual pivot at $77.05. The euro is between its August 24th low of 1.2591 and its 50-day simple moving average at 1.2849. The major equity averages still straddle monthly pivots at 10,164 on Dow Industrials, 1074.9 S&P 500, 2196 NASDAQ, 4364 Dow Transports and 652.82 on Russell 2000. The Dow remains influenced by my annual pivot at 10,379. The Tangled Web Among Yields, Gold, Crude Oil, the Euro and Stocks
 
10-Year Note – (2.757) Annual value levels are 2.813 and 2.999 with daily, monthly, weekly, quarterly and semiannual risky levels at 2.624, 2.562, 2.507, 2.495 and 2.249.
 
Courtesy of Thomson / Reuters
 
Comex Gold – ($1246.00) Weekly, semiannual, quarterly and annual value levels are $1223.7, $1218.7, $1140.9 and $1115.2 with daily, semiannual and monthly risky levels at $1258.2, $1260.8 and $1263.8. Note that gold is still overbought on its daily chart.        
 
Courtesy of Thomson / Reuters
 
Nymex Crude Oil ($73.97) Quarterly value level is $56.63 with daily and monthly pivots is $72.46 and $74.45, and weekly, annual and semiannual risky levels at $76.76, $77.05 and $83.94.   
 
 
Courtesy of Thomson / Reuters
 
The Euro – (1.2705) Quarterly and monthly value levels are 1.2167, 1.1721 and 1.1424 with daily, weekly and semiannual risky levels at 1.2752, 1.3168 and 1.4733.
 
Courtesy of Thomson / Reuters
 
Daily Dow: (10,415) Monthly and quarterly value levels are 10,164 and 7,812 with annual and daily pivots at 10,379 and 10,432, and weekly, semiannual and annual risky levels at 10,515, 10,558 and 11,235. My annual risky level at 11,235 was tested at the April 26th high of 11,258.01. The 50-day simple moving average is 10,286 with the 21-day at 10,249, and 200-day simple moving average as resistance at 10,452. Longer term its still “Dow 8500 Before 11,500”.
 
Courtesy of Thomson / Reuters
 
The Tangled Web Among Yields, Gold, Crude Oil, the Euro and Stocks
 
I do not believe that we are in a bond bubble, but that does not mean that yields are headed lower. The 10-Year yield has formed a trading range between my annual pivot at 2.813 and my semiannual risky level at 2.249 with monthly and quarterly pivots in-between at 2.562 and 2.495. The cycle low yield has been 2.419 set on August 25th. My second annual pivot remains at 2.999. The bottom line is that the 10-Year yield can trade in a 75 basis points range between 2.999 and 2.249 as long as the Federal Reserve maintains a zero percent funds rate for an extended period and as long as the Fed buys US Treasuries.
 
Comex Gold has tried but has failed to set a new all time high this week, so the June 21st high of $1266.5 remains as the all time high. The high of $1264.7 set on Wednesday was a failed test of my semiannual and monthly risky levels at $1260.8 and $1263.8. My lower semiannual pivot has become a value level at $1218.7.
 
Nymex Crude Oil traded between $87.15 down to $67.15 between May 3rd and May 25th and my annual pivot at $77.05 has been a strong magnet in-between. This month’s pivot has become a magnet at $74.45.
 
The Euro had strength that failed between its 50-day simple moving average at 1.2843 and its 200-day simple moving average at 1.3298. The euro is now below both, which should bring selling pressure to stocks.
 
The major equity averages still straddle monthly pivots at 10,164 on Dow Industrials, 1074.9 S&P 500, 2196 NASDAQ, 4364 Dow Transports and 652.82 on Russell 2000.
  • Strength on the Dow should stall between my annual pivot at 10,379 and my semiannual risky level at 10,558.
  • The S&P 500 held my annual value level at 1014.2 on July 1st and returned to my semiannual pivot at 1100.7. The 200-day simple moving average is a barrier at 1115.56.
  • The NASDAQ has been under the influence of semiannual and annual pivots at 2223, 2242 and 2250 below its 200-day simple moving average at 2272.
  • Dow Transports have been trading between my annual pivot at 4324 and my semiannual pivot at 4467. Transports can provide either upside or downside leadership with a semiannual value level at 3530 and an annual risky level at 4955.
  • The Russell 2000 has been the laggard versus its monthly pivot at 652.82 and the key level to hold on weakness is my semiannual pivot at 592.92.
  • The worst performer the SOX should be a leader, but it’s stuck well below its 50-day and 200-day simple moving averages at 340.20 and 349.93.
 
That’s today’s Four in Four. Have a great day.
 
Richard Suttmeier
Chief Market Strategist
ValuEngine.com
(800) 381-5576
 
Send your comments and questions to Rsuttmeier@Gmail.com. For more information on our products and services visit www.ValuEngine.com
 
As Chief Market Strategist at ValuEngine Inc, my research is published regularly on the website www.ValuEngine.com. I have daily, weekly, monthly, and quarterly newsletters available that track a variety of equity and other data parameters as well as my most up-to-date analysis of world markets. My newest products include a weekly ETF newsletter as well as the ValuTrader Model Portfolio newsletter. You can go HERE to review sample issues and find out more about my research.
 
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