NEW YORK (TheStreet) -- Last week was rough for stock market traders and investors as the Dow Industrial Average led the five major averages lower. Dow Industrials closed at 15,879 on Friday, 709 points below the all-time intraday high at 16,588.25 set on the last day of 2013. Dow transports set an all-time intraday high at 7591.43 last Thursday then closed Friday at 7259 down 332 points from the high in just one day.
If this downside volatility continues my pre-earnings buy-and-trade profiles become even more important as guidance for traders and investors. This week there are many companies reporting results and I begin my analysis with bellwether Apple (AAPL) which reports after the close today. Then tomorrow premarket we hear from Dow component DuPont (DD) and automobile manufacturer Ford Motor (F).
Stock market weakness plus a lower 30-Year Treasury bond yield reduced the percentage of stocks overvalued to a still extremely elevated 81.3% down from 85.3% from Thursday. The percentage of stocks overvalued by 20% or more declined to 44.5% from 52.7%.
The technicals for the five major averages remain overbought on their weekly charts but only the Nasdaq ended last week above its five-week modified moving average at 4105. Dow Industrials, the S&P 500, Dow transports and Russell 2000 have thus been downgraded to neutral. Weekly closes below all five-week MMAs with all 12x3x3 weekly slow stochastic readings declining below 80.00 signals the end to the bull market for stocks, and the equities bubble will finally pop.
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