NEW YORK (TheStreet) -- The Nasdaq and Russell 2000 ended last week with negative weekly charts while Dow Industrials, S&P 500 and Dow transports did not. This sets up a new dimension in the bull vs. bear debate as all five major averages need to have negative weekly charts for the bears to win this tug-of-war and pull the bulls into their den.
Monday was the last day of March and the last day of the first quarter and thus we have new monthly and quarterly value levels, pivots and risky levels.
The first quarter of 2014 was choppy and volatile influenced by numerous pivots from our proprietary analytics. I described the value levels, pivots and risky levels as a 'tangled bowl of spaghetti' and this type of trading should continue in the second quarter.
We crunched the numbers for the major equity averages and for three related ETFs to help you decide if and when to invest. Note that the monthly and quarterly weekly levels are new and are based upon the March 31 closes. See today's 'Crunching the Numbers' table following these profiles.
The Dow Industrial Average (16458) set an all-time intraday high at 16588 on Dec. 31 then traded as low as 15341 on Feb. 5 which was below its 200-day simple moving average. The rebound since then has been as high as 16505 on March 7. The weekly chart remains positive given a close this week above its five-week modified moving average at 16260. Monthly and semiannual value levels are 16297 and 16245 with a quarterly pivot at 16462 and weekly and semiannual risky areas at 16710 and 16860. Our annual value levels lag at 14835 and 13467.
The S&P 500 (1872.3) traded as low as 1737.9 on Feb. 5 which was below our semiannual value levels at 1797.3 and 1764.4 then rallied to a new all-time intraday high at 1883.9 on March 21. The weekly chart is positive but overbought with its five-week MMA at 1850.8. Semiannual value levels remain at 1797.3 and 1764.4 with a quarterly pivot at 1853.5 and monthly and weekly risky levels at 1895.6 and 1913.5. Annual value levels lag at 1539.1 and 1442.1.
The Nasdaq (4199) traded as low as 3968 on Feb. 5 staying above its semiannual value levels at 3930 and 3920 then traded to a new multiyear intraday high at 4371 on March 7. The weekly chart stays negative on a close this week below its five-week MMA at 4215. Quarterly and semiannual value levels are 4039, 3930 and 3920 with weekly and monthly risky levels at 4365 and 4446. Annual value levels lag at 3471 and 3063.
The Dow Transportation Average (7575) traded to a 2014 low at 7010 on Feb. 5 which was below our semiannual value levels at 7376 and 7245 then traded to a new all-time intraday high at 7627 on March 7. The weekly chart is positive with its five-week MMA at 7448. Quarterly and semiannual value levels are 7407, 7376 and 7245 with a weekly pivot at 7531 and a monthly risky level at 7812. Annual value levels lag at 6249 and 5935.
The Russell 2000 (1173.04) traded to a 2014 low at 1082.72 on Feb. 5 which was below our semiannual value levels at 1133.29 and 1130.79 then traded to a new all-time intraday high at 1212.82 on March 4. The weekly chart will remain negative given a close this week below its five-week MMA at 1168.78. Semiannual value levels are 1133.29 and 1130.79 with a quarterly pivot at 1169.22 and weekly and monthly risky levels at 1201.45 and 1211.52.
SPDR Dow Jones Industrial Average ETF (DIA) ($164.24, down 0.7% YTD) set its all-time intraday high at $165.51 on Dec. 31 then traded as low as $153.12 on Feb. 5 which was below its 200-day SMA. The rebound from there was as high as $164.89 on March 7. The weekly chart is positive with its five-week MMA at $162.34. Monthly and semiannual value levels are $162.69 and $162.05 with a quarterly pivot at $164.18 and weekly and semiannual risky levels at $166.92 and $167.82. Annual value levels are $148.05 and $134.45.
SPDR S&P 500 ETF (SPY) ($187.01, up 1.3% YTD) traded as low as $173.71 on Feb. 5 then rallied to a new all-time intraday high at $189.02 on March 21. The weekly chart is positive but overbought with its five-week MMA at $185.06. Semiannual value levels are $179.50 and $176.28 with a quarterly pivot at $185.09 and monthly and weekly risky levels at $189.50 and $191.59. Annual value levels are $153.89 and $144.14.
PowerShares QQQ Trust ETF (QQQ) ($87.67, up 0.1% YTD) traded as low as $83.39 on Feb. 5 then rallied to a multiyear intraday high at $91.37 on March 7. The weekly chart is negative with its five-week MMA at $88.16. Semiannual and quarterly value levels are $84.59, $84.58 and $83.64 with weekly and monthly risky levels at $91.44 and $93.75. Annual value levels are $75.42 and $65.34.
The bull vs. bear tug-of-war is between the Nasdaq ETF on the bear side, and the Dow 30 ETF and S&P 500 ETF on the bull side. Weekly closes below the five-week MMAs at $88.16 on QQQ Trust, $162.34 the Dow ETF and $185.06 on S&P ETF favors the bear, above all three favors the bull.
To summarize in terms of the major equity averages closes this week below the five-week MMAs at 16260 Dow Industrials, 1850.8 S&P 500, 4215 Nasdaq, 7448 Dow Transports and 1168.78 Russell 2000 favors the bears, above all favors the bulls.
Crunching the Numbers with Richard Suttmeier
There are five columns with moving average titles: Five-Week Modified Moving Average, 21-Day Simple Moving Average, 50-Day Simple Moving Average, 200-Day Simple Moving Average and the 200-Week Simple Moving Average.
The column labeled 12x3x3 Weekly Slow Stochastics shows the pattern on each weekly chart with readings from Oversold, Rising, Overbought, Declining or Flat.
Interpretations: (stocks below a moving average listed in Red are below that moving average)
Five-Week Modified Moving Average (MMA) is one of two indicators that define whether or not a weekly chart profile is positive, neutral or negative. The other is the status of the 12x3x3 weekly slow stochastic.
A stock with a positive technical rating is above its five-week MMA with rising or overbought stochastics.
A stock with a negative technical rating is below its five-week MMA with declining or oversold stochastics.
A stock with a neutral technical rating has a profile that is not positive or negative.
The 200-Week Simple Moving Average (SMA) is considered a long-term technical support or resistance and as a "reversion to the mean" over a rolling three to five year horizon. (even Apple declined to its 200-week SMA in June 2013)
The 21-Day Simple Moving Average is a short-term technical support or resistance used by many hedge fund traders to adjust positions. A stock above its 21-day SMA will likely move higher over a rolling three to five day horizon and vice versa.
The 50-Day Simple Moving Average is also a technical support or resistance used by many strategists and commentators in financial TV.
The 200-Day Simple Moving Average is another technical support or resistance and I consider this level as a shorter-term "reversion to the mean" over a rolling six to 12 month horizon. (even Apple tested or crossed its 200-day SMA in nine of the last 10 years)
Value Levels, Pivots and Risky Levels are calculated based upon the last nine weekly closes (W), nine monthly closes (M), nine quarterly closes (Q), nine semiannual closes (S) and nine annual closes (A). I have one column for pivots, which is a magnet for the period shown. The columns to the left of the pivots are first and second value levels. The columns to the right of the pivots are first and second risky levels.
Investors who wish to buy a stock should use a good-until-canceled GTC limit order to buy weakness to a value level. Investors who want to sell a stock should use a GTC limit order to sell strength to a risky level.
At the time of publication the author held no positions in any of the stocks mentioned.
This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff