transports and small caps are the weakest of the major averages

8/6/2019 Transports and Small Caps are the weakest of the Major Averages

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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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July 29, 2011 – Transport s and Smal l Caps are the w eakest of t he Major Averages

The Dow Transportation Average and Russell 2000 are below both their 21-day and 50-day

simple moving averages; the 21-days are 5408 and 831.67 with the 50-day’s at 5324 and 817.16.It is extremely important for the Transports and Russell 2000 to remain above their 200-daySMAs at 5160 and 795.63. The Philadelphia Semiconductor Index (SOX) is below all threemoving averages at 402.01, 408.04 and 418.55. As I said at the beginning of the month, volatilityis in both directions. My illustration is the Dow Industrial Average - Weekly closes above thefive-week modified moving average at 12,434 indicates upside to my monthly risky level at13,155. Next week we will have a new monthly risky level. Weekly closes below the five-weekMMA indicates risk is to my annual value level at 11,491. The Dow needs to rebound intoFriday’s close, so a debt ceiling compromise is a must.

10-Year Note – (2.956) Quarterly, semiannual and monthly value levels are 3.053, 3.791 and 3.832with a daily pivot at 3.000, and weekly and annual risky levels at 2.885 and 2.690. The July trading

range is between the July 1st high at 3.223 and the July 12th low at 2.814.

Courtesy of Thomson / Reuters



Comex Gold – ($1615.2) Weekly, monthly and semiannual value levels are $1563.3, $1547.9 and$1469.9 with a daily pivot at $1606.5, the new all time high at $1628.8, and semiannual and quarterly

risky levels at $1644.8 and $1655.8.


Nymex Crude Oil – ($97.12) My weekly value level is $93.07 with the 200-day simple moving averagat $94.84, my annual pivots at $99.91 and $101.92 and daily, quarterly and semiannual risky levels at

$100.71, $102.40 and $103.92.




The Euro – (1.4311) My monthly and quarterly value levels are 1.4133 and 1.3728 with my weeklypivot at 1.4403, and daily and semiannual risky levels at 1.4550, 1.4752 and 1.4872.


Daily Dow: (12,240) The daily chart is negative with daily closes below the 21-day simple movingaverage at 12,517. The Dow is below its 50-day at 12,329 with the 200-day at 11,973. The weeklychart shifts to neutral on weekly closes below the five-week modified moving average at 12,434. Myannual value level is 11,491 with a weekly pivot at 12,253, daily risky level at 12,602, the May 2nd high

at 12,876, and monthly, quarterly and annual risky levels at 13,155, 13,839 and 13,890.




S&P 500 – (1300.7) The weekly chart shifts to neutral given weekly closes below the five-weekmodified moving average (MMA) at 1320.6. The daily chart stays negative given daily closes below th

21-day simple moving average at 1326.1. SPX is below its 50-day at 1310.11 with the 200-day at1284.27. Weekly, annual and semiannual value levels are 1291.3, 1210.7, 981.3 and 855.7 with adaily risky level at 1342.8, the May 2nd high at 1370.58, and monthly, quarterly and annual risky levelsat 1422.8, 1467.0 and 1562.9.

NASDAQ – (2766) The weekly chart shifts to neutral with weekly closes below the five-week MMA at2784. The daily chart stays negative given daily closes below the 21-day simple moving average at2809. The NASDAQ is above its 50-day and 200-day at 2754 and 2703. Weekly, annual andsemiannual value levels are 2721, 2335 and 2199 with a daily risky level at 2860, the May 2 nd high at2887.75, monthly, quarterly and annual risky levels at 2975, 3109 and 3243.

NASDAQ 100 (NDX) – (2372) The weekly chart stays positive with weekly closes above the five-week

MMA at 2345. The daily chart is negative with closes below the 21-day simple moving average at2374. NDX is well above its 50-day and 200-day at 2318 and 2279. Set a new multi-year high at 2437.42 on Monday. Weekly, semiannual and annual value levels are 2310, 1951, 1861 and 1723with a daily risky level at 2452, and monthly, annual and quarterly risky levels at 2483, 2590 and 2630

Dow Transports – (5197) The weekly chart shifts to negative with weekly closes below the five-weekMMA at 5369. The daily chart stays negative with daily closes below the 21-day simple movingaverage at 5408. DJT is below its 50-day at 5323 with the 200-day at 5160. DJT has been above its200-day since September 1, 2010. Annual and semiannual value levels are 5179, 4335 with a weeklypivot at 5247 and daily risky level at 5362, the July 7 th high at 5627.85, and monthly, quarterly andannual risky levels at 5736, 6112 and 6131.

Russell 2000 – (799.34) The weekly chart shifts to negative with weekly closes below the five-weekMMA at 827.50. The daily chart stays negative with daily closes below the 21-day simple movingaverage at 831.67. RUT is below its 50-day at 817.05 with the 200-day at 795.60. RUT has beenabove its 200-day since September 17, 2010. Annual and semiannual value levels are 784.16, 577.47and 530.04 with a weekly pivot at 802.02 and daily risky level at 829.69, the May 2nd high at 868.57,and quarterly and annual risky levels at 924.95, 930.83 and 978.58.

The SOX – (390.53) The weekly chart stays negative on weekly closes below the five-week MMA at409.55. The daily chart stays negative with daily closes below the 21-day simple moving average at402.01. The SOX is below its 50-day and 200-day at 407.99 and 418.54. A negative is that the 50-dayis below the 200-day. Weekly, annual and semiannual value levels are 376.27, 270.98, 258.97 and

204.67 with a daily risky level at 411.30, the May 2

nd

high at 450.79, and monthly, quarterly and annuarisky levels at 482.54, 493.22 and 531.14.

Equity Fundamentals – Fairly Valued!• 59.7% of all stocks are undervalued / 40.3% of all stocks are overvalued• Eleven sectors are undervalued – Basic Industries by 5.8%, Computer and Technology by

6.6%, Construction by 8.8%, Industrial Products by 6.0% and Medical by 6.9%• Five sectors are overvalued with Oils-Energy overvalued by 6.1%• P/E Ratios – Range from 20.9 times for Aerospace to 57.5 times for Oils-Energy.



Definition of MOJO – This is my term for technical momentum. I use what’s 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.

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

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transports and small caps are the weakest of the major averages

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