Dow / SPX breakout must be followed by the lagging indices.

8/4/2019 Dow / SPX breakout must be followed by the lagging indices.

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Richard Suttmeier is the Chief Market Strategist at www.ValuEngine.com.ValuEngine is a fundamentally-based quant research firm in Newtown, PA. ValuEnginecovers over 7,000 stocks every day.

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September 1 , 2011 Dow / SPX breakout must be fo l lowed by the lag ging ind ices.

With the closes in August above my annual pivots at 11,491 Dow and 1210.7 SPX the upside is

to annual risky levels at 5179 Dow Transports and 784.16 Russell 2000. The Dow IndustrialAverage is now up on the year by 0.3%, but Transports is down 8.6%, Russell 2000 is down7.3%, the SOX is down 13.6% and the Regional Banking Index (BKX) is down 23.5%. A weeklyclose below 11,491 Dow and 1210.7 SPX indicates a false breakout as the weekly charts staynegative if Fridays closes are below the five-week modified moving averages at 11,675 DowIndustrials, 1227.7 SPX, 2590 NASDAQ, 4826 Dow Transports and 741.80 Russell 2000. A falsebreakout indicates risk back to my annual pivot at 2335 on NASDAQ. Note that all monthlycharts are overbought with a negative divergence in MOJO except the SOX, which is negativeand below its 120-month SMA at 403.12.

10-Year Note (2.232) The monthly chart shows a double bottom around the 2.00% mark inDecember 2008 and August 2011. Daily, semiannual, annual, monthly and quarterly value levels are

2.348, 2.414, 2.690, 2.715 and 3.053 with weekly and semiannual risky levels at 1.914 and 1.672.

Courtesy of Thomson / Reuters


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Comex Gold ($1827.7) The monthly chart shows that the parabolic bubble remains in play.Daily, monthly, quarterly and semiannual value levels are $1785.1, $1702.3, $1655.8 and $1644.8 wit

my weekly risky level at $1907.5.


Nymex Crude Oil ($88.89) A negative monthly chart reflects a weakening economy indicatingrisk to the 120-month simple moving average at $61.37. The 200-week SMA is $83.85 with a

weekly pivot at $86.56, my daily risky level at $90.63, the 50-day / 200 day death cross at $91.68 and$95.20, my annual pivots at $99.91 and $101.92 and quarterly, semiannual and monthly risky levels a$102.40, $103.92 and $104.23.



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The Euro (1.4367) The monthly chart show a trading range between 1.20 and 1.60. Weekly andquarterly value levels are 1.4153 and 1.3728 with daily, semiannual and monthly risky levels at 1.4447

1.4752, 1.4872 and 1.5164.


Monthly: (11,614) The monthly chart remains overbought, but note the negative divergence andthat weakness held the 120-month simple moving average at 10,575. My weekly value level is10,987 with the 200-week and 120-month simple moving averages at 10,716 and 10,575, my annualpivot at 11,491, and daily and monthly risky levels at 11,874 and 12,779. Semiannual value levels are

9,635 and 8,468 with the 50-day and 200-day simple moving average death cross at 11,915 and11.993, and quarterly and annual risky levels at 13,839 and 13,890.



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S&P 500 (1218.9) Weekly and Semiannual value levels are 1135.9, 981.3 and 855.7 with my annuapivot at 1210.7, daily and monthly risky levels at 1245.5 and 1342.1, the 50-day and 200-day SMAs

death cross at 1256.16 and 1283.89 and quarterly and annual risky levels are 1467.0 and 1562.9.NASDAQ (2579) Weekly, annual and semiannual value levels are 2430, 2335, 2199 and 2049 withdaily and monthly risky levels at 2648 and 2827, the 50-day and 200-day SMAs death cross at 2655and 2704, and quarterly and annual risky levels at 3109 and 3243.

NASDAQ 100 (NDX) (2241) Weekly, semiannual and annual value levels are 2148, 1951, 1861 and1723 with daily and monthly risky levels at 2302 and 2431, the 50-day and 200-day SMAs death crossat 2269 and 2285, and annual risky level at 2590.

Dow Transports (4667) Semiannual, weekly, and semiannual value levels are 4335, 4221 and 3868with daily, annual and monthly risky levels at 4770, 5179 and 5190, and the 50-day and 200-day SMAdeath cross at 5004 and 5135.

Russell 2000 (726.74) Weekly and semiannual value levels are 663.88, 577.47 and 530.04 withdaily, annual and monthly risky levels at 748.17, 784.16 and 825.19 and the 50-day and 200-daySMAs death cross at 769.31 and 794.96.

The SOX (355.79) Weekly, annual and semiannual value levels are 319.35, 270.98, 258.97 and204.67 with daily and monthly risky levels at 369.48 and 418.07, the 50-day and 200-day SMAs deathcross at 377.97 and 416.49 and quarterly and annual risky levels at 493.22 and 531.14.

Equity Fundamentals Stocks are undervalued. 79.7% of all stocks are undervalued / 20.3% of all stocks are overvalued. In March 2009, 91.1%

of all stocks were undervalued. All sixteen sectors are undervalued, fifteen by double-digit percentages, six by 20.1% to 25.1%

Back in March 2009 the sectors were undervalued by 33% to 45%. Check out and subscribeto www.ValuEngine.com.

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Definition of MOJO This is my term for technical momentum. I use whats called 12x3x3 slowstochastic readings from daily, weekly and monthly charts. The scale is zero to 10.0 where above 8.0is overbought and below 2.0 is oversold.


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Buy and Trade Strategies for Long Positions

Value Level The price at which you establish an additional long position on share priceweakness. This is done on a GTC Limit Order to buy weakness to the Value Level.

Risky Level The price at which you remove a single long position or reduce a multiplelong position on share price strength. This is done on a GTC Limit Order to sell strength tothe Risky Level.

Buy and Trade Strategies for Short Positions

Value Level The price at which you remove a single short position or reduce a multipleshort position on share price weakness. This is done on a GTC Limit Order to buy weaknesto the Value Level.

Risky Level The price at which you establish an addition short position on share pricestrength. This is done on a GTC Limit Order to sell strength to the Risky Level.

Richard SuttmeierChief Market StrategistValuEngine.com(800) 381-5576

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Dow / SPX breakout must be followed by the lagging indices.

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