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Pivots Still at Play in January

Here are the pivots that continue to be magnets in January:

The Yield on the 10-Year Treasury Note (1.870%): The rise in yield held my annual value level at 1.981% on Jan. 4. Wall Street and most buy-side strategists have been advising investors to avoid U.S. Treasuries for years now. At the end of 2007 investors could have bought the 10-year note at 4.035%, and today this would be a 5-Year note which ended 2012 at 0.724%. The S&P was 1468 at the end of 2007 and 1426 at the end of 2012. My annual and semiannual value levels are 2.476% and 3.063% with the annual pivot at 1.981% and my semiannual risky level at 1.413%. Remember that QE3 and QE4 will continue until the unemployment rate falls to 6.5%.

Comex Gold ($1,687.3): My monthly pivot at $1,673.8 has been a magnet so far in January as expected. My annual value level is $1,599.9 with a monthly pivot at $1,673.8 and semiannual, quarterly and annual risky levels at $1,719.2, $1,802.9 and $1,852.1. Gold may rebound but I do not expect a re-inflation of the gold bubble. The weekly chart for gold shifts to positive with a close today above the five-week modified moving average at $1,682.3.

Nymex Crude Oil ($95.32): I expected oil to rebound to test my quarterly risky level at $95.84 and this was accomplished Thursday. My monthly value level lags at $74.23 with a quarterly pivot at $95.84 and annual risky levels at $115.23 and $115.42. Rising oil prices should not be viewed as a re-inflation of a bubble. The weekly chart has been positive since the week of Dec. 21, with the five-week MMA at $91.29 and the 200-week simple moving average at $85.20.

The Euro vs. the U.S. Dollar (1.3375): My semiannual value level is 1.2797 with annual and quarterly pivots at 1.3257 and 1.3346. A barrier to the upside is the 200-week MMA at 1.3526, as the weekly chart will become overbought next week. What most market participants do not realize is that the euro is weaker versus the dollar since ending 2007 at 1.459, which is between the June 2010 low at 1.1880 and the July 2008 high at 1.6035.

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