NEW YORK ( TheStreet) -- Dow transports and Russell 2000 were the leaders to new all time highs in mid-March. Since then these two have been the laggards. The Dow industrials and S&P 500 performed like a sling-shot to all time highs on April 11 with the Nasdaq setting a multi-year high the same day. Since then the Dow industrials have held up the best among the five, but Dow utilities is now the best performer year to date with a multi-year high set on April 15.This configuration is a flight to defense in the equities market, a negative divergence overall. The other U.S. capital markets also provide warning flags for U.S. equities. There is no bond bubble as the yield on U.S. Treasury 10-year has declined on a "flight to quality" out of risky assets which includes U.S. stocks in general. This yield moved above my annual pivot at 1.981% to 2.087% into March 8 then began to decline before equities peaked. This yield could decline to my semiannual risky level at 1.413%. The gold bubble ended in 2011 and the precious metal is now below its 200-week simple moving average at $1435.3 after being above that key support since 2002. It appears that investors do not need a hedge against inflation or deflation, and with the stronger dollar, the idea that gold is a currency of last resort is off the table for now. Given the weakness in gold and other commodities the basic materials sector has become 15.6% undervalued. Only 18 stocks in this sector of 418 stocks have buy ratings and with 162 rated sell, this sector is rated underweight in my judgment.
The crude oil bubble popped in 2008 and with huge supplies of oil now in storage a trend below its 200-week simple moving average at $87.45 appears possible which would indicate risk to my quarterly value level at $79.66. Crude oil has been trading back and forth around its 200-week SMA since mid-2009 and the oils-energy sector is now 1.5% undervalued. This sector consists of 565 stocks with only 28 rated buy and with 134 rated sell, so this sector is also rated underweight.
Boeing ( BA) ($86.12 vs. $85.37 on March 21) had a sell rating, but was upgraded to hold shortly the March 21 post. Boeing reports quarterly results pre-market on April 24 and is expected to earn $1.47 per share. My monthly value level is $77.99 with annual and semiannual risky levels at $88.82 and $89.98 vs. the multi-year high at $89.46 set on April 11. Buy-and-trade investors could have booked profits on that strength between $88.82 and $89.98. Ford Motor ( F) ($12.75 vs. $13.36 on March 21) still has a sell rating and reports its quarterly results pre-market on April 24 and is expected to earn 41 cents per share. My quarterly value level is $8.51 with a monthly risky level at $14.45. General Motors ( GM) ($28.98 vs. $29.10 on March 21) still has a sell rating and reports quarterly results pre-market on May 2 and is expected to earn 63 cents per share. My annual value level is $20.40 with a monthly risky level at $32.55.
Looking at my semiannual levels, a weekly close below 1566.9 on the S&P 500 indicates risk to 14,323 Dow industrials. Annual and semiannual pivots have been magnets at 5925 and 5955 on Dow transports. The Russell 2000 remains well below its semiannual risky level at 965.51. With the neutral zone between 14,323 Dow industrials and 1566.9 S&P 500 intact a market top cannot yet be confirmed but the warning flags wave. A weekly close below my semiannual value level at 14,323 on Dow industrials is my signal calling for a market top. At the time of publication the author held no positions in any of the stocks mentioned. Follow @Suttmeier This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.