S&P 500 Faces Do or Die Situation

Wednesday, Discount Retailers Continue to Lag Despite Recovery updated my profiles for nine buy rated retailers in the retail-wholesale sector. Eight of the nine lag the market peaking between March and October 2012.

My Thursday post, Apple Wins the Search for Value, explained how I came to the conclusion that Apple is the best value play in today's stock market, and concluded that a breakout for the S&P 500 requires leadership from Apple.

All week long the stock market has been trading higher under the cloud of a ValuEngine Valuation Warning and this morning 66.9% of all stocks are overvalued, a new high for this measure so far this year. We also show that 15 of 16 sectors are overvalued, 14 by double-digit percentages.

The major equity averages are even more overbought technically with 12x3x3 weekly slow stochastic readings at: 94.65 for the Dow Industrials, up from 93.16 last week; 93.88 for the S&P 500, up from 92.59 last week; 90.63 on NASDAQ, up from 88.95 last week; 95.33 on Dow Transports, up from 93.94 last week; and 93.55 on the Russell 2000, up from 92.49 last week. Readings above 80.00 are overbought.

Here is my weekly review of the key levels for U.S. capital markets:

The yield on the 10-year treasury note (2.033): My annual and semiannual value levels are 2.476% and 3.063% with my annual pivot at 1.981% and monthly risky level at 1.796%.

Comex Gold ($1592.3): The December 2011 low is $1523.9 with my annual pivot at $1599.9 as gold has become oversold on its weekly chart. Semiannual, monthly, quarterly and annual risky levels remain at $1719.2, $1737.6, $1802.9 and $1852.1.

Nymex Crude Oil ($93.55): The 200-week SMA is $86.83 with the five-week MMA at $93.10, and a close above this level shifts the weekly chart profile to neutral from negative. My quarterly pivot is $95.84 with monthly and annual risky levels at $98.23 and $115.23.

The euro vs. the dollar (1.3058): The weekly chart profile is negative with the five-week MMA and 200-week SMA at 1.3154 and 1.3523. My semiannual value level is 1.2797 with monthly and annual pivots at 1.3249 and 1.3257 and quarterly pivot at 1.3334.

« First ‹ Previous 1 2 3 Next › Last »