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Downside Risks for Gold, Oil and Stocks

NEW YORK ( TheStreet) -- This week's volatility within the U.S. capital markets was influenced by generally weak economic data, the Supreme Court's decision on Obamacare, and now this morning the positive reaction to the bailout plans from the European Union.

Overnight we learned that eurozone leaders agreed to form a centralized supervisory body for eurozone banks by the end of 2012, which is a major step to creating a European banking union.

If this morning's market strength in gold, crude oil and stocks holds or extends into today's closes, it will effect my projections for the second half of 2012. In looking at the daily charts, however, the impact is within the recent trading ranges. The yield on the 10-year U.S. Treasury is between the low of the past two weeks at 1.555 and the 50-day simple moving average at 1.731.

Comex gold, which traded as low as $1,547.60 the troy ounce Thursday, rebounded to $1,574 overnight, still below my annual pivot at $1575.80. Nymex crude oil, which traded as low as $77.28 per barrel Thursday remains below its 200-week simple moving average at $80.51 Friday. The euro vs. the dollar rebounded to 1.2624 still below the two-week high at 1.2746.

Next week I will have new weekly, monthly, quarterly and semiannual value levels, pivots and risky levels for yields, commodities, currencies, the major equity averages and more than 7,000 stocks. Annual value levels, pivots and risky levels remain the same and will not change until the end of the year.

Remember my theory: Nine years of market closes factor in all possible bullish or bearish events for any given market or stock. My models are designed to evaluate the risk reward between value levels and risky levels with pivots in-between suggesting reversal-oriented trading.

In addition to my proprietary analytics, this is a time of the year to analyze the monthly charts to see if there are any important patterns or moving averages to help make second-half forecasts. Today, I will evaluate the monthly charts for: The yield on the 10-Year U.S. Treasury, Comex Gold, Nymex Crude Oil, the Euro vs. U.S. dollar, and the Dow Industrial Average.
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