Dow, S&P, Nasdaq Are Puffing Up the Bubble
The major equity averages have entered a zone of risky levels and some have become pivots. My monthly value level is 6941 Dow Transports with monthly pivots at 16,093 Dow Industrials, 1820.2 S&P 500 and 1143.82 Russell 2000, and weekly and monthly risky at 16,435 Dow Industrials, 1855.7 S&P 500, 4101 and 4114 Nasdaq, 7487 Dow Transports and 1152.68 Russell 2000.
Semiannual and quarterly pivots are 1743.5 S&P 500, 3759 and 4025 Nasdaq, 7104 and 7205 Dow transports and 1089.42 Russell 2000 with semiannual and quarterly risky levels at 16,490 and 16,775 Dow Industrials, 1853.8 S&P 500 and 1163.21 Russell 2000. If the stock bubble pops in December the risk is to my annual value levels at 12,696 Dow Industrials, 1348.3 S&P 500, 2806 Nasdaq, 5469 Dow transports, and 809.54 Russell 2000.
This week there has been a debate as to whether or not stocks are in a bubble. I have been saying that a bubble is inflating, but you don't know how high the major averages can go before the bubble bursts.
Recent readings on the ISM surveys have been stronger than expected, which has some analysts talking QE tapering by the Federal Reserve. This morning we will find out it nonmanufacturing ISM keeps pace with the stronger than expected manufacturing readings. New home sales will give us a read on the market for new homes, and this afternoon the focus becomes the latest Fed Beige Book.
Readings on holiday sales have been mixed question spending on Main Street, USA. According to the National Retail Federation consumers spent $57.4 billion over the Thanksgiving weekend, down 2.7% year over year.The U.S. economy has been generating what some economists call dead-end jobs, not career-starting opportunities. According to Opportunity Nation 2013, our country's overall poverty and income inequality are on the rise. These antidotes suggest that holiday sales will be challenged. At the time of publication the author held no positions in any of the stocks mentioned. Follow @Suttmeier This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.
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