Today's ValuEngine shows that 15 or 16 sectors are overvalued, with 14 overvalued by double-digit percentages. Six sectors are overvalued by 20% or more; retail-wholesale by 24.3%, transportation by 23.5%, autos-tires-trucks by 23.5%, finance by 21.4%, consumer staples by 21.0%, and consumer discretionary by 20.0%. Technical momentum is also becoming more overbought. For the Nasdaq, its 12x3x3 weekly slow stochastic reading is 88.48 on a scale of 00.00 to 100.00, where readings above 80.00 are overbought. The Dow Industrial Average is the most overbought, with a reading of 92.16.
Since the year 2000, all major equity averages have crossed their 200-day simple moving averages as a reversion to the mean. Nasdaq is well above its 200-day simple moving average, at 3133. To trade the Nasdaq 100, consider the PowerShares QQQ Trust ( QQQ) ($74.26). My quarterly value level is $68.95, with a semiannual risky level at $78.39. The 200-day SMA is 67.71, last crossed as 2013 began. Wednesday was a key reversal day. Keep an eye on the PHLX Housing Sector Index ( HGX) (202.63) as a close this week below last week's low of 203.33 is a weekly key reversal. For the major equity averages to have weekly key reversals, they would have to close below last week's lows: 15,053.46 Dow Industrials, 1626.74 S&P 500, 3426.67 Nasdaq, 6324.48 on Dow Transports and 971.24 Russell 2000. At the time of publication the author held no positions in any of the stocks mentioned.Follow @SuttmeierThis article is commentary by an independent contributor, separate from TheStreet's regular news coverage.