NEW YORK (TheStreet) -- The stock market rebounded this week negating potential negative weekly closes for the major equity averages except the Nasdaq. The Nasdaq needs to close above 3089 to avoid having a negative weekly chart.
The other majors would have to sink Friday to close below their key levels. If it wasn't for the
-effect on the Nasdaq, QE fatigue might be considered in remission. This would not eliminate the downside risk, but is a indication that the
Dow Industrial Average
can stretch QE hype toward their October 2007 highs.
Strength this week has the major equity averages straddling their monthly value levels, pivots and risky levels, which sets the overall neutral trading range. The Dow Industrial Average moved above its monthly pivot at 13,506 with the S&P below its monthly pivot at 1468.0.
are above their monthly pivots at 4859 and 827.70 respectively. The Nasdaq provides the monthly risky level at 3210.
Google fell off its fiscal cliff at 12:30 p.m. Thursday with a premature earnings report that was a considerable disappointment. Google could thus be the carrier of "QE3 fatigue" spreading the contagion to the Nasdaq. If the tech-heavy average ends the week below its five-week modified moving average at 3089 its weekly chart would shift to negative.
Google was upgraded to a buy on Wednesday for the rally to $755.49, but then downgraded to a hold for Thursday's open. With Thursday's close at $695.00 the stock is upgraded back to a buy. My quarterly value level is $615.86 with quarterly and monthly pivots at $713.85 and $720.41.
Friday morning we show that 52.3% of all stocks are undervalued with 47.7% overvalued. Fourteen of 16 sectors are overvalued led by construction by 18.2%, medical by 16.1%, retail-wholesale by 14.3%, consumer staples by 14.2%, utilities by 13.4% and finance by 13.2%
Analysis of the Yield on the 10-Year Treasury Note
(1.831): The weekly chart has shifted back to showing risk to higher yields given a close Friday with the yield above the five-week modified moving average at 1.684%. My quarterly and annual value levels 2.109% and 2.502% with my semiannual pivot at 1.853% and monthly and semiannual risky levels at 1.681% and 1.389%.
Analysis of Comex Gold
($1,742.3): The weekly chart for gold remains positive and overbought, but a weekly close below the five-week MMA at $1,733.5 shifts the profile to neutral. My semiannual, monthly and annual value levels are $1,702.50, $1,643.30, $1,606 and $1,575.80 with quarterly risky levels at $1,844.90 and $1,881.40.
Analysis of Nymex Crude Oil
($91.98): The weekly chart for crude oil stays negative on a close Friday below the five-week MMA at $92.67. My monthly pivot at $91.34 continues to be a stabilizing force. The 200-week simple moving average is a major support at $82.21 with annual and quarterly risky levels at $103.58 and $107.31.
Analysis of the Euro vs. the Dollar
(1.3069): The weekly chart stays positive with a close Friday above the five-week MMA at 1.2820. My monthly value level is 1.2589 with semiannual and quarterly pivots at 1.2917 and 1.3048, and this week's risky level at 1.3408.
Analysis of the Dow Industrial Average
(13,549): The weekly chart shows overbought MOJO with the five-week MMA at 13,356. My annual value level lags at 12,312 with my monthly pivot at 13,506 and annual and quarterly risky levels at 14,032 and 14,192. The QE3 high is 13,661.87 on Oct. 5, and the October 2007 high is 14,198.10. Note that my risky levels are below the 2007 high.
Analysis of the Dow Transportation Average
(5157): The weekly chart for the Dow Transports shifts to positive on a close today above the five-week MMA at 5041. My monthly value level is 4859 with the Sept. 14 QE3 high at 5231.15, and its all time high at 5627.85 was set on July 7, 2011.
Analysis of the S&P 500
(1457.3): The weekly chart shows overbought MOJO with the five-week MMA at 1432.0. My annual value level is 1363.2 with a monthly pivot at 1468.0 with quarterly and annual risky levels at 1513.3 and 1562.9. The Sept. 14 QE3 high is 1474.51 with the October 2007 high at 1576.09. Note that my risky levels are below the 2007 high.
Analysis of the Nasdaq
(3073): The weekly chart shifts to negative on a close Friday below the five-week MMA at 3089. My annual value level lags at 2698 with monthly, annual and quarterly risky levels at 3210, 3232 and 3295. The Sept. 21 QE3 high is 3196.93.
Analysis of the Russell 2000
(837.13): The weekly chart shifts to neutral from negative with a close Friday above the five-week MMA at 830.37. My monthly pivot is 827.70 with my annual pivot at 836.15 and the Sept. 14 QE3 high at 868.50 and the all time high at 868.57 set on May 2, 2011.
Analysis of the Semiconductor Index or SOX
(376.28): The weekly chart stays negative on a close Friday below the five-week MMA at 386.01. The 200-week simple moving average is 355.25 with my monthly risky level at 385.39 and the Sept. 14 high at 410.82.
This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.
Richard Suttmeier has an engineering degree from Georgia Tech and a master of science from Brooklyn Poly. He began his career in the financial services industry in 1972 trading U.S. Treasury securities in the primary dealer community. In 1981 he formed the Government Bond Department at LF Rothschild and helped establish that firm as a primary dealer in 1986. Richard began writing market research in 1984 and held positions as market strategist at firms such as Smith Barney, William R Hough, Joseph Stevens, and Rightside Advisors. He joined
in 2008 producing newsletters covering the U.S. capital markets, and a universe of more than 7,000 stocks. Richard employs
and can be reached at