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QE Fatigue Spreads from Transports to Semiconductors

Stocks in this article: FDX NSC SOX CAT

U.S. Treasury yields declined this week from 1.758% at last Friday's close to 1.639% at yesterday's close. The yield on the 30-year bond declined from 2.955% to 2.825%. This improved equity valuations slightly, but ValuEngine still shows more overvalued sectors than undervalued sectors.

This morning we show that 50.7% of all stocks are undervalued with 49.3% overvalued. Twelve of 16 sectors are overvalued -- utilities by 17.9%, medical by 14.9%, consumer staples by 14.5%, finance by 13.4% and retail-wholesale by 12.9%.

Here are the sectors and industries I covered in my stories this week.

Sept. 24: Book Profits on Tech Stocks

Sept. 25: The SOX May Provide Another Warning

Sept. 26: Don't Bank on Bank Stocks, Just Trade Them

Sept. 27: Homebuilders' Valuations Are Extremely Speculative

This week Comex Gold has been consolidating below the Sept. 21 high at $1790.0, shy of my quarterly risky level at $1805.9.

Nymex Crude Oil began the week below its 50-day simple moving average at $93.53 and a close today below $94.26 shifts the weekly chart to negative, which would be another sign of QE fatigue as it spreads into the energy sector. The euro versus the dollar stayed above its 200-day simple moving average at 1.2823.

It was a week of no new highs in the equity markets this week so far. The Dow industrials, S&P 500, the Nasdaq and Russell 2000 will remain positive but overbought on their weekly charts while Dow transports still suffers QE Fatigue with a negative weekly chart.

Analysis of the yield on the 10-year Treasury note. (1.639): The weekly chart for the U.S. Treasury 10-year shifts to neutral on a close today below the five-week modified moving average at 1.697%. My semiannual value level at 1.853% is the high end of the trading range and my semiannual risky level remains at 1.389%.

Analysis of Comex Gold ($1779.8): The weekly chart for gold remains positive but overbought with the five-week modified moving average at $1697.8. My semiannual and annual value levels are $1702.5, $1643.3 and $1575.8 with a quarterly risky level at $1805.8.

Analysis of Nymex Crude Oil ($92.10): The weekly chart for crude oil becomes negative on a close today below the five-week modified moving average at $94.26. My semiannual value level is $76.71 with my annual risky level at $103.58.

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