Back to the bull/bear stocks debate.
In my first post of 2014, Stocks Begin 2014 With Inflating Bubbles I described that my value levels, pivots and risky levels for the major equity averages were like a 'tangled bowl of spaghetti' and the semiannual levels will be with use until the end of June and the annual levels will last until the end of the year. Two weeks from now we will have new monthly and quarterly levels.
My semiannual value levels are 3930 and 3920 on the Nasdaq with semiannual pivots at 16245 Dow Industrials, 1797.3 and 1764.4 on the S&P 500, 7376 and 7245 Dow transports and 1133.29 and 1130.79 Russell 2000 and semiannual risky level at 16,860 Dow Industrials.
The only levels not yet crossed in 2014 are 3930 and 3920 Nasdaq and 16,860 Dow Industrials. The bulls win the debate if the Dow Industrials sets a new all-time high and tests 16,860 on or before June 30, up 4.9% from Friday's close at 16,065.67. The bears win the debate if the Nasdaq declines to 3920 on or before June 30, which is down 7.7% from Friday's close at 4245.40.
I am on the bear side of the debate as my prediction for 2014 remains that the major equity averages will test their 200-day simple moving averages in 2014 and these ended last week at; 15620 Dow Industrials, 1737.5 S&P 500, 3859 Nasdaq, 6841 Dow transports and 1086.42 Russell 2000.To confirm significant market highs require negative weekly chart profiles. The major averages have rising or overbought 12x3x3 weekly slow stochastic readings and they need to be declining to confirm market highs. There also needs to be weekly closes below the five-week modified moving averages and last week close on Dow Industrials was below its five-week MMA at 16158. The others were above at; 1837.1 S&P 500, 4226 Nasdaq, 7385 Dow Transports and 1166.48 Russell 2000. Given negative weekly charts the downside is to annual value levels at 14835 and 13467 Dow Industrials, 1539.1 and 1442.1 S&P 500, 3471 and 3063 Nasdaq, 6249 and 5935 Dow Transports and 966.72 and 879.39 Russell 2000. The downside risks from Friday's closes to the lowest annual value levels are: 16.2% Dow Industrials, 21.7% S&P 500, 27.9% Nasdaq, 20.6% Dow transports and 25.6% Russell 2000. If these levels are tested before year-end the bulls must buy the bears fresh picnic baskets. At the time of publication the author held no positions in any of the stocks mentioned. Follow @Suttmeier This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff
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