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Santa Claus Mojo Continues Despite the Cliff

Analysis of Nymex Crude Oil ($87.79): The monthly chart remains negative with the five-month MMA at $92.27 and the 120-month SMA at $70.01. The weekly chart is neutral with the five-week MMA at $88.54 and the 200-week SMA at $83.55. My annual and quarterly risky levels are $103.58 and $107.31.

Analysis of the Euro vs. the Dollar (1.2971): The monthly chart remains positive with the five-month MMA at 1.2896 and the 120-month SMA at 1.3127. The weekly chart is neutral with the five-week MMA at 1.2845 and the 200-week SMA at 1.3517. My semiannual and quarterly pivots at 1.2917 and 1.3048 should maintain the recent trading range.

Analysis of the Dow Industrial Average (13,022): The monthly chart remains overbought with the five-month MMA at 12,959 with the 120-month SMA lagging at 10,995. The weekly chart stays negative with a weekly close below the five-week MMA at 13,050. The 200-week SMA lags at 11,144. My annual value level is 12,312 with my annual risky level at 14,032.

Analysis of the S&P 500 (1416.0): The monthly chart remains overbought with the five-month MMA at 1380.7 with the 120-month SMA lagging at 1202.2. The weekly chart shifts to neutral with a weekly close above the five-week MMA at 1406.2 with the 200-week SMA at 1186.5. My annual pivot is 1363.2 with my quarterly risky level at 1513.3.

Analysis of the Nasdaq (2927): The monthly chart remains overbought with the five-month MMA at 2964 with the 120-month SMA lagging at 2250. The weekly chart shifts to positive with a weekly close above the five-week MMA at 2979 with the 200-week SMA at 2470. My annual value level is 2698 with my annual risky level at 3232.

Analysis of the Dow Transportation Average (5145): The monthly chart is neutral with declining Mojo and monthly close above the five-month MMA at 5068 with the 120-month SMA lagging at 4131. The weekly chart shifts to positive with a weekly close above the five-week MMA at 5027 with the 200-week SMA at 4514. My semiannual value levels are 4449 and 4129 with my quarterly risky level at 5541.

Analysis of the Russell 2000 (823.20): The monthly chart remains neutral with flat Mojo and a monthly close above the five-month MMA at 805.41 and the 120-month SMA lagging at 663.29. The weekly chart shifts to positive with a weekly close above the five-week MMA at 809.11 with the 200-week SMA at 695.48. My semiannual value level is 686.25 with my annual risky level at 836.16.

Stock market strength over the past two weeks continues to build a base for a Santa Claus rally. This process will gather upward momentum given weekly closes above the five-week modified moving averages. The only major average that begins the day below its five-week MMA is the Dow Industrial Average (13,050). It may take another week to have rising Mojo among all five of the major averages. I project that my proprietary analytics will show monthly value levels or pivots, not monthly risky levels, and this configuration is conducive to continuing Santa Claus rally.

At the time of publication the author held no positions in any of the stocks mentioned.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

Richard Suttmeier has an engineering degree from Georgia Tech and a master of science from Brooklyn Poly. He began his career in the financial services industry in 1972 trading U.S. Treasury securities in the primary dealer community. In 1981 he formed the Government Bond Department at LF Rothschild and helped establish that firm as a primary dealer in 1986. Richard began writing market research in 1984 and held positions as market strategist at firms such as Smith Barney, William R Hough, Joseph Stevens, and Rightside Advisors. He joined www.ValuEngine.com in 2008 producing newsletters covering the U.S. capital markets, and a universe of more than 7,000 stocks. Richard employs a "buy and trade" investment strategy and can be reached at RSuttmeier@Gmail.com.
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