Santa Claus Mojo Continues Despite the Cliff
Stocks are fundamentally neutral according to www.ValuEngine.com as 60% of all stocks are undervalued, but 11 of 16 sectors are overvalued. The construction sector is the most overvalued by 14.6% followed by the consumer staples sector overvalued by 14.4%. The cheapest sector is multi-sector conglomerates at 6.9% undervalued.
On Monday, I wrote, Amazon, Google Wake Up To Downgrades as these stocks were downgraded to hold from buy, and thus became buy-and-trade stocks based upon pure Santa Claus Mojo.
On Tuesday, I wrote, Apple Wakes Up to a Downgrade to hold from buy and thus also became a buy-and-trade stock based upon Santa Claus Mojo.
Amazon, Apple & Google were the subject of my Nov. 21 story Santa Claus Rally Eyed for Online Leaders Apple, Amazon and Google where I explained why these stocks had the ability to lead a Santa Claus rally.
On Wednesday, I wrote, Homebuilders Are Risky Bets Despite Positive Data where I explained that the home builders continued to be overvalued and trading on pure Mojo and that investors should book profits in these stocks.
On Thursday, I wrote, Retail Bubble Stocks Play On Earnings Momentum and these names were seeing improving Mojo and remain stocks to consider in buy-and-trade strategies.
Analysis and Key Levels for U.S. Capital Markets:
Analysis of the Yield on the 10-Year Treasury Note (1.622%): The monthly chart shows that the decline in yield is overdone, but with a potential QE4 on the way yields should stay low. The five-month modified moving average is 1.755% with the 120-month simple moving average at 3.647%. The weekly chart continues to favor a trading range between my semiannual value level at 1.853% and my semiannual risky level at 1.389% with the five-week MMA at 1.675% and the 200-week SMA at 2.777%.
Analysis of Comex Gold ($1,725.70): The monthly chart remains positive with the five-month MMA at $1,679.7. The weekly chart is neutral with the five-week MMA at $1,725.30. This favors a trading range between my semiannual pivot at $1,702.50 and quarterly risky levels at $1,844.90 and $1881.40. My semiannual and annual value levels are $1,643.30 and $1,575.80.
Analysis of Nymex Crude Oil ($87.79): The monthly chart remains negative with the five-month MMA at $92.27 and the 120-month SMA at $70.01. The weekly chart is neutral with the five-week MMA at $88.54 and the 200-week SMA at $83.55. My annual and quarterly risky levels are $103.58 and $107.31.