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  • A Dow Theory Buy Signal or A Double-Top at 11,450?

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    The US Treasury auctioned $21 billion 10-Year notes at 3.340 on Wednesday, so this yield is up 100 basis points since testing 2.334 on October 8th. On “60 Minutes” last Sunday, Fed Chief Bernanke said, “What we’re doing is lowering interest rates by buying Treasury securities.” Well Ben it ain’t working! Comex Gold has had a significant correction off its all time high at $1432.5 set Tuesday. The 50-day simple moving average is support at $1360.3. Gold has been above the rising 50-day since August 12th. Nymex Crude oil traded to a 52-week high at $90.76 on Tuesday and this week’s value level is $86.30. The euro remains below my quarterly pivot at 1.3318 with the 200-day at 1.3116. The Dow needs a close above 11444.08 to confirm another Dow Theory Buy Signal, but without that signal we risk a double-top at 11,450 instead. A close above 1228.74 SPX would have violated the 61.8% Fibonacci Retracement of the decline from October 2007 into March 2009. This week’s risky level is 1236.20. This week’s other risky levels / pivots are 2662 NASDAQ, 5110 Transports, 758.57 Russell 2000 and 420.81 SOX.

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    The US Treasury auctioned $21 billion 10-Year notes at 3.340 on Wednesday, so this yield is up 100 basis points since testing 2.334 on October 8th. On “60 Minutes” last Sunday, Fed Chief Bernanke said, “What we’re doing is lowering interest rates by buying Treasury securities.” Well Ben it ain’t working! Comex Gold has had a significant correction off its all time high at $1432.5 set Tuesday. The 50-day simple moving average is support at $1360.3. Gold has been above the rising 50-day since August 12th. Nymex Crude oil traded to a 52-week high at $90.76 on Tuesday and this week’s value level is $86.30. The euro remains below my quarterly pivot at 1.3318 with the 200-day at 1.3116. The Dow needs a close above 11444.08 to confirm another Dow Theory Buy Signal, but without that signal we risk a double-top at 11,450 instead. A close above 1228.74 SPX would have violated the 61.8% Fibonacci Retracement of the decline from October 2007 into March 2009. This week’s risky level is 1236.20. This week’s other risky levels / pivots are 2662 NASDAQ, 5110 Transports, 758.57 Russell 2000 and 420.81 SOX.

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    A Dow Theory Buy Signal or A Double-Top at 11,450?

    Uploaded by

    ValuEngine.com
    The US Treasury auctioned $21 billion 10-Year notes at 3.340 on Wednesday, so this yield is up 100 basis points since testing 2.334 on October 8th. On “60 Minutes” last Sunday, Fed Chief Bernanke said, “What we’re doing is lowering interest rates by buying Treasury securities.” Well Ben it ain’t working! Comex Gold has had a significant correction off its all time high at $1432.5 set Tuesday. The 50-day simple moving average is support at $1360.3. Gold has been above the rising 50-day since August 12th. Nymex Crude oil traded to a 52-week high at $90.76 on Tuesday and this week’s value level is $86.30. The euro remains below my quarterly pivot at 1.3318 with the 200-day at 1.3116. The Dow needs a close above 11444.08 to confirm another Dow Theory Buy Signal, but without that signal we risk a double-top at 11,450 instead. A close above 1228.74 SPX would have violated the 61.8% Fibonacci Retracement of the decline from October 2007 into March 2009. This week’s risky level is 1236.20. This week’s other risky levels / pivots are 2662 NASDAQ, 5110 Transports, 758.57 Russell 2000 and 420.81 SOX.

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    of 4

    Richard Suttmeier is the Chief Market Strategist at www.ValuEngine.com.

    ValuEngine is a fundamentally-based quant research firm in Newtown, PA. ValuEngine


    covers over 7,000 stocks every day.

    A variety of newsletters and portfolios containing Suttmeier's detailed research, stock picks,
    and commentary can be found at http://www.valuengine.com/nl/mainnl

    December 9, 2010 – A Dow Theory Buy Signal or a Double-Top at 11,450?

    The US Treasury auctioned $21 billion 10-Year notes at 3.340 on Wednesday, so this yield is up
    100 basis points since testing 2.334 on October 8th. On “60 Minutes” last Sunday, Fed Chief
    Bernanke said, “What we’re doing is lowering interest rates by buying Treasury securities.”
    Well Ben it ain’t working! Comex Gold has had a significant correction off its all time high at
    $1432.5 set Tuesday. The 50-day simple moving average is support at $1360.3. Gold has been
    above the rising 50-day since August 12th. Nymex Crude oil traded to a 52-week high at $90.76
    on Tuesday and this week’s value level is $86.30. The euro remains below my quarterly pivot at
    1.3318 with the 200-day at 1.3116. The Dow needs a close above 11444.08 to confirm another
    Dow Theory Buy Signal, but without that signal we risk a double-top at 11,450 instead. A close
    above 1228.74 SPX would have violated the 61.8% Fibonacci Retracement of the decline from
    October 2007 into March 2009. This week’s risky level is 1236.20. This week’s other risky levels
    / pivots are 2662 NASDAQ, 5110 Transports, 758.57 Russell 2000 and 420.81 SOX.
    10-Year Note – (3.244) My semiannual value level is 3.479 with weekly and daily pivots at 3.142 and
    3.178, and annual pivots at 2.999 and 2.813, and quarterly, semiannual and monthly risky levels at
    2.265, 2.249 and 1.949. Note that this yield is above its 200-day simple moving average.

    Courtesy of Thomson / Reuters


    Comex Gold – ($1382.4) Quarterly, semiannual and annual value levels are $1306.4, $1260.8,
    $1218.7 and $1115.2 with a weekly pivot at $1400.5, and daily and monthly risky levels at $1420.6 and
    $1443.5. Note that Tuesday was a Key Reversal Day.

    Courtesy of Thomson / Reuters

    Nymex Crude Oil – ($88.51) Semiannual, annual and monthly value levels are $83.94, $77.05 and
    $75.50 with a weekly pivot at $86.30, and daily, semiannual and annual risky levels at $91.13, $96.53
    and $97.29. Note that Tuesday was a Key Reversal Day.

    Courtesy of Thomson / Reuters


    The Euro – (1.3261) Daily and monthly value levels are 1.3198 and 1.2500 with my quarterly pivot at
    1.3318, and Weekly and semiannual risky levels at 1.3473 and 1.4733.

    Courtesy of Thomson / Reuters

    Daily Dow: (11,372) Semiannual, annual, monthly and quarterly value levels are 10,558, 10,379,
    10,325 and 8,523 with annual and semiannual pivots at 11,235 and 11,296, and weekly and daily risky
    levels at 11,440 and 11,469.

    Courtesy of Thomson / Reuters


    That’s today’s Four in Four. Have a great day.
    Richard Suttmeier
    Chief Market Strategist
    ValuEngine.com, (800) 381-5576
    Send your comments and questions to Rsuttmeier@Gmail.com. For more information on our products and services visit
    www.ValuEngine.com
    As Chief Market Strategist at ValuEngine Inc, my research is published regularly on the website www.ValuEngine.com. I have daily, weekly, monthly, and
    quarterly newsletters available that track a variety of equity and other data parameters as well as my most up-to-date analysis of world markets. My
    newest products include a weekly ETF newsletter as well as the ValuTrader Model Portfolio newsletter. You can go HERE to review sample issues and
    find out more about my research.

    “I Hold No Positions in the Stocks I Cover.”

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