Richard Suttmeier is the Chief Market Strategist at www.ValuEngine.com. ValuEngine is a fundamentally-based quant research firm in Melbourne, FL.

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September 6, 2013 Fridays closes may confirm or deny the August highs as cycle highs.

The yield on the US Treasury 10-Year note rose to new multi-year high at 2.997% on Thursday with the 30-Year bond yield up to 3.887% versus its multi-year high at 3.940% set on August 22. Let me reiterate that the purpose of the Feds QE3 and QE4 was to bring down long term rates including mortgage rates. The 30-Year fixed rate mortgage is 4.57% up 123 basis points since January. What investors do not understand is that the QEs were not implemented to prop up the stock market. As a result of stock market strength it trades under a ValuEngine valuation warning with 74.6% of all stocks overvalued. A higher bond yield will intensify this warning. The economic focus for Friday is Nonfarm Payrolls and the Unemployment Rate on Friday. Gold traded lower this week and on its daily chart tested its 21-day SMA at $1367.5 with the 50-day SMA at $1317.5. The weekly chart remains positive given a weekly close above its five-week MMA at $1355.3. The 200-week simple moving average is a resistance at $1471.8. Crude oil continues to trade above its 50-day SMA at $105.21 on a neutral daily chart. The weekly chart remains overbought with the five-week MMA at $105.70 per barrel. Oil traded as high as $112.24 last week but closes have been below my semiannual pivot at $109.84. The 200-week simple moving average is a major support at $90.47. 10-Year Note (2.981) My semiannual value level is 3.227 with daily, monthly, weekly, annual, and semiannual risky levels at 2.856, 2.725, 2.625, 2.476, 1.981 and 1.719. Comex Gold ($1368.3) My monthly value level is $1224.6 with daily, weekly, annual, quarterly and annual risky levels at $1398.7, $1466.4, $1599.9, $1603.0 and $1852.1. Nymex Crude Oil ($108.33) Monthly and quarterly value levels are $105.67 and $91.75 with daily, semiannual, weekly and annual risky levels at $109.85, $109.84, $110.32 and $115.23. The Euro (1.3119) Daily, monthly and semiannual value levels are 1.3106, 1.3111, 1.2756 and 1.2477 with annual, weekly and annual risky levels at 1.3257, 1.3673 and 1.4295. To become bearish all five major equity averages need to end the week below their five-week MMAs at 15,115 Dow Industrials, 1658.7 S&P 500, 3603 Nasdaq, 6395 Dow Transports and 1025.86 Russell 2000. The Nasdaq is the only one of the five with overbought weekly momentum. To confirm the early-August highs as cycle highs all five major averages must have negative weekly chart profiles. The Nasdaq needs to end this week below 3603 with mojo below 80.00 and the current reading is 86.44, so a confirmation of cycle highs appears unlikely today.

My quarterly and annual value levels remain at 14,288 / 12,696 Dow Industrials, 1525.6 / 1348.3 S&P 500, 3284 / 2806 Nasdaq, 5348 / 5469 Dow Transports, and 863.05 / 860.25 / 809.54 Russell 2000. My monthly and semiannual risky levels are 16,336 / 16,490 Dow Industrials, 1766.8 / 1743.5 S&P 500, 3772 / 3759 Nasdaq, 7061 / 7104 Dow Transports and 1093.07 / 1089.42 Russell 2000. The Dow Industrial Average is between its 200-day SMA at 14,469 and its 50-day SMA at 15,249. The S&P 500 is well above its 200-day SMA at 1566.58 and is just below its 50-day SMA at 1664.50. The Nasdaq is above its 50-day SMA at 3590 with the August 5 multi-year high at 3694.18. The Dow Transportation Average is well above its 200-day SMA at 6023 and is just below its 50-day SMA at 6408. The Russell 2000 is well above its 200-day SMA at 944.29 and tested its 50-day at 1030.39. Daily Dow: (14,937) Daily, quarterly and annual value levels are 14,731, 14,288 and 12,696 with the August 2 all time high at 15,658.43, and weekly, monthly and semiannual risky levels at 15,389, 16,336 and 16,490. S&P 500 (1655.1) Daily, quarterly and annual value levels are 1624.6, 1525.6 and 1348.3 with the August 2 all time high at 1709.67, and weekly, monthly and semiannual risky levels at 1712.6, 1766.8 and 1743.5. NASDAQ (3659) Daily, quarterly and annual value levels are 3591, 3284 and 2806 with the August 5 multi-year high at 3694.18, and weekly, monthly and semiannual risky levels at 3763, 3772 and 3759. NASDAQ 100 (NDX) (3130) Daily, quarterly and annual value levels are 3075, 2983 and 2463 with the August 13 multi-year high at 3149.24, and weekly, monthly and semiannual risky levels at 3216, 3185 and 3304. Dow Transports (6380) Daily, annual and quarterly value levels are 6196, 5925, 5469 and 5348 with a weekly risky level at 6595, the August 1 all time high at 6686.86, and monthly and semiannual risky levels at 7061 and 7104. Russell 2000 (1028.69) Daily, quarterly and annual value levels are 1007.4, 863.05, 860.25 and 809.54 with the August 5 all time high at 1063.52, and weekly, monthly and semiannual risky levels at 1067.52, 1093.07 and 1089.42. The SOX (477.04) Daily, quarterly and annual value levels are 464.92, 404.59 and 338.03 with a weekly pivot at 467.37, and monthly and semiannual risky levels at 516.08 and 533.56. Dow Utilities: (471.86) No nearby value levels with daily and semiannual risky levels at 475.17 and 481.92 and weekly, quarterly, semiannual, monthly and annual risky levels at 509.84, 510.38, 523.33, 530.89 and 540.37. To learn more about ValuEngine check out www.ValuEngine.com. Any comments or questions contact me at RSuttmeier@gmail.com.