We begin March with ValuEngine 59.5% of all stocks overvalued with 15 of 16 sectors overvalued, eight by double digit percentages. Consumer staples is the most overvalued by 22.9% followed by construction overvalued by 22.4%, then transportation by 20%. The major equity averages have overbought weekly and monthly charts. The 12x3x3 weekly slow stochastic readings are 91.42 for the Dow Industrials up from 89.02 last week, 91.30 for the S&P 500 up from 90.08 last week, 87.39 for the Nasdaq up from 86.71 last week, 94.50 for the Dow transports up from 92.38 last week, and 91.60 on the Russell 2000 slipping slightly from 91.77 last week. Readings above 80.00 are overbought.
My Weekly Review of U.S. Capital Markets Key Levels:
The Yield on the 10-Year Treasury Note (1.857%): My February monthly risky level at 1.843% was the low yield for the month, tested on Feb 26. My annual and semiannual value levels are 2.476% and 3.063% with my annual pivot at 1.981% and new monthly risky level at 1.796%. Comex Gold ($1569.9): Traded to a low of $1,554.3 on Feb. 21 then rebounded above my annual pivot at $1,599.9 before ending February below that key level. The December 2011 low is $1,523.9 with my annual pivot at $1,599.9 and semiannual, monthly, quarterly and annual risky levels at $1,719.2, $1,737.6, $1,802.9 and $1,852.1. Nymex Crude Oil ($91.13): The 200-week simple moving average is $86.48 with my quarterly pivot at $95.84 and monthly and annual risky levels at $98.23, $115.23 and $115.42. Euro vs. U.S. Dollar (1.3039): My semiannual value level is 1.2797 with monthly and annual pivots at 1.3249 and 1.3257 and quarterly pivot at 1.3334. The 200-week SMA is a resistance at 1.3529. Dow Industrial Average (14,054): Quarterly and annual value levels are 13,668, 12,696 and 12,509 with a monthly pivot at 13,949 and semiannual risky level at 14,323. The October 2007 high is 14,198.10 and the all-time closing high is 14,164.53 set Oct. 9, 2007. S&P 500 (1514.7): Quarterly and annual value levels are 1431.1 and 1348.3 with a monthly pivot at 1528.6, and semiannual risky level at 1566.9, which is below the October 2007 high at 1576.09. Nasdaq (3160): Quarterly and annual value levels are 3071, 2806 and 2790 with a monthly pivot at 3197, and quarterly risky level at 3274.