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Equities Rally to New Highs But Resistance Looms


Daily charts are overbought and stocks are overvalued.

Editor's Note: This article was written by Richard Suttmeier, chief market strategist at, which is a fundamentally-based quant research firm in Princeton, New Jersey, that covers more than 5,000 stocks every day.

10-Year Note
-- No nearby supports with semiannual, daily, and weekly pivots at 3.675, 3.669, and 3.642, and monthly resistance at 3.477. Semiannual support is 4.250. The US Treasury auctions $44 billion 2-Year notes next Tuesday, $42 billion 5-Year notes Wednesday, and $32 billion 7-Year notes on Thursday.

Comex Gold -- Daily, quarterly and weekly supports are $1110.3, $1084.9, and $1070.5 with my annual pivot at $1115.2. Semiannual and monthly resistances are $1139.7, $1186.5, and $1195.4. The bubble caused by overly easy Fed policy has popped, but the 200-week simple moving average remains the bullish long-term uptrend.

Nymex Crude Oil
-- Annual, weekly, and quarterly supports are $77.05, $76.87, and $67.22 with monthly and daily pivots at $80.05 and $81.61, and quarterly, annual, and semiannual resistances at $85.21, $97.29, and $97.50. The 200-day simple moving average is $73.58 with a zone of chart resistance between $82 and $84.

The Euro -- Weekly support is 1.3094 with a daily pivot at 1.3722, and quarterly and monthly resistances at 1.4327 and 1.4504. The trading range is 1.345 to the 50-day at 1.385.

The Major Equity Averages

Dow -- Annual and weekly supports are 10,379 and 10,034 with a daily pivot at 10,778. Quarterly support is 6,705 with annual, monthly, and semiannual resistances at 11,235, 11,461, 11,442, and 11,949. The 50-day is 10,400 with the Dow extremely overbought.

S&P 500 -- Weekly support is 1077.2 with daily and annual resistances at 1171.3 and 1179.0. Annual and quarterly supports are 1014.2, 701.8, and 681.7 with semiannual and monthly resistances at 1194.6 and 1212.9.

NASDAQ -- Semiannual, annual, and weekly supports are 2258, 2250 and 2206 with a semiannual pivot at 2392, and daily and monthly resistances at 2412 and 2430. Annual support is 1659.

Dow Utilities -- Weekly support is 351.38 with a daily pivot at 382.30 and monthly resistance at 391.82. Quarterly support is 280.79 with annual and semiannual resistances at 456.73, 471.95, and 492.05.

Dow Transports
-- Weekly support is 3971 with my annual pivot at 4324, and daily and semiannual resistances at 4484 and 4488. Quarterly supports are 3386 and 3225 with monthly resistance at 4513. Annual and semiannual resistances are 4955 and 5218.

Russell 2000 -- Weekly support is 629.20 with semiannual and monthly pivots at 673.50 and 682.85, and daily resistance at 688.35.

-- Weekly support is 331.57 with semiannual and daily pivots at 358.89 and 364.05, and monthly resistance at 379.97. Semiannual, annual, and quarterly supports are 271.90, 259.45, 241.05, and 207.69.

Valuations are stretched according to ValuEngine -- 10 of 11 sectors are overvalued with Consumer Durables by 16.0%, Basic Industries by 13.9%, and Energy by 10.6%.

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No positions in stocks mentioned.
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