NEW YORK (TheStreet) -- The FOMC doubled-down its quantitative easing programs as their foolish monetary policy continues. QE3 continues with the Federal Reserve Open Market trading desk purchasing $40 billion in mortgage-backed securities per month.

QE4 adds another $45 billion in monthly purchases of longer-dated US Treasury securities. Adding to this foolishness is a Federal Reserve target for the unemployment rate. The FOMC will maintain the zero to 0.25% federal funds rate until the unemployment rate falls below 6.5%. To me this means that the new normal for full employment will be an unemployment rate at 6.5%. YIKES!

When I wrote Stocks Go Cliff Hanging Anticipating QE4 on Wednesday I predicted stocks were rallying in anticipation of QE4, and once that event was confirmed the markets would return to the possibility that the U.S. economy would fall off the fiscal cliff as 2013 begins.

I predicted that the QE4 market highs would be below the QE3 reaction high ending the first upward bungee move, which began from the Nov. 16 lows. If the bungee pattern holds the next market lows will be above the Nov. 16 lows, unless the cord breaks.

Here's the scorecard of market volatility as investors focused on QE3, then the fiscal cliff, then on QE4, and now back to the cliff.

Key Levels for the US Capital Markets

Analysis of the Yield on the 10-Year Treasury Note (1.732%): The weekly chart shows that this yield remains locked in a trading range between 1.894% set on Sept. 14, the day after QE3 was announced, and 1.377%, the record low yield set on July 25. This range is influenced by my semiannual value level at 1.853% and my semiannual risky level at 1.389%.

Analysis of Comex Gold ($1697.7): The weekly chart favors lower gold prices given a close today below the five-week modified moving average at $1,714.9. Gold is trading between its 200-day simple moving average at $1,663.3 and its 50-day SMA at $1,724.7 around my semiannual pivot at $1,702.5. My monthly and semiannual value levels are $1679.3 and $1,643.3. My annual value level remains at $1,575.8 for the remainder of the year.

Analysis of Nymex Crude Oil ($86.76): The weekly chart is neutral with oil between its 200-week SMA at $84.03 and its five-week MMA at $87.81. There appears to be upside potential to the 200-day SMA at $92.80. My monthly value level is $78.18 with my annual risky level at $103.58.

Analysis of the Euro vs. the Dollar (1.3088): The weekly chart shifts to positive on a weekly close above the five-week MMA at 1.2927 with upside potential to the 200-week SMA at 1.3518. My monthly value level lags at 1.2203 with semiannual and quarterly pivots at 1.2917 and 1.3048.

Analysis of the Dow Industrial Average (13,170.72): The Dow set a QE4 reaction high at 13,329.44 on Wednesday on an overbought daily chart. The QE3 high was 13,661.87 set on Oct. 5. The bungee jump bottom was 12,471.48 set on Nov. 16. The weekly chart stays positive with a close today above the five-week MMA at 13,086.55. Below is my monthly value level at 12,826 with my annual value level at 12,312.

Analysis of the S&P 500 (1419.45): The S&P 500 set a QE4 reaction high at 1438.59 on Wednesday on an overbought daily chart. The QE3 high was 1474.51 set on Sept. 14. The bungee jump bottom was 1343.35 set on Nov. 16. The weekly chart stays positive with a close today above the five-week MMA at 1411.89. Below are my monthly and annual value levels at 1378.6 and 1363.2.

Analysis of the Nasdaq (2992.16): Set a QE4 reaction high at 3035.19 on Wednesday on a neutral daily chart. The QE3 high was 3196.93 set on Sept. 21. The bungee jump bottom was 2810.80 set on Nov. 16. The weekly chart stays positive with a close today above the five-week MMA at 2985.36. Below are my monthly and annual value levels at 2893 and 2698.

Analysis of the Nadaq 100 (2654.01): The daily chart shows what technicians call a "Death Cross" with the 50-day SMA at 2670.82 declining below the 200-day SMA at 2672.40. The weekly chart is poised for a weekly close below the five-week MMA at 2656.54. My annual pivot is 2603 with my monthly value level at 2596. The Nasdaq 100 is well below its QE3 high at 2878.38, set on Sept. 21.

Analysis of the Dow Transportation Average (5182.16): The 2012 trading range has a year to date high of 5390.11 set on March 19 and a year to date low of 4795.28 set on June 4. The daily chart is overbought and the weekly chart stays positive on a close today above the five-week MMA at 5086.15. My monthly value level is 4930.

Analysis of the Russell 2000 (824.20): I consider Wednesday's QE4 reaction high at 837.29 as a failed test of my annual pivot at 836.15. The QE3 high was 868.50 set on Sept. 14. The daily chart is overbought and the weekly chart stays positive with a close today above the five-week MMA at 815.81. My monthly value level is 786.64.

Analysis of the PHLX Semiconductor Sector Index ( SOXX) (383.67): I consider Wednesday's QE4 reaction high at 391.29 as a failed test of the 200-day SMA at 389.36. The QE3 high was 410.82 set on Sept. 14, which is well below the year to date high of 444.96 set on March 27. The daily chart is overbought and the weekly chart stays positive on a close today above the five-week MMA at 375.58. The 200-week SMA is a major support at 361.44.

At the time of publication the author held no positions in any of the stocks mentioned.

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 www.ValuEngine.com in 2008 producing newsletters covering the U.S. capital markets, and a universe of more than 7,000 stocks. Richard employs a "buy and trade" investment strategy and can be reached at RSuttmeier@Gmail.com.

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