Richard Suttmeier is the Chief Market Strategist at
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May 31, 2011 – Stock Market Resiliency and Vulnerability
The resiliency of the US stock market is its ability to bend but not break. The major equityaverages had a 7% pullback from mid-February to mid-March, but then traded to new year todate highs on May 2
. Stocks have moved lower in May, but weekly closes have not been ableto confirm longer term down trends. Fundamentally stocks are overvalued. ValuEngine issueda ValuEngine Valuation Warning on February 18
and a ValuEngine Valuation Watch on May2
. The Dow Industrial Average remains overbought on its weekly chart. A close this weekbelow the five-week modified moving average at 12,468 shifts the weekly chart profile tonegative. The downside is my annual value level at 11,491. The S&P 500, NASDAQ, DowTransports and Russell 2000 need to close below 1332.3, 2802, 5366 and 834.65 for a full set ofnegative weekly charts.
New monthly value and risky levels on June 1
could decide the story.
This yield moved from 3.052 to 3.108 overnight not holding its 200-day simple moving average at 3.087.
Daily and weekly pivots are 3.118 and 3.066 as stocks gain.
Courtesy of Thomson / Reuters