Stock Melt-Up Continues to Ignore Warnings

The stock melt-up has the major equity averages above this week’s pivots putting the focus on the Nasdaq and its quarterly risky level at 2853. The Dow Transports broke above the potential double-top. Stocks are ignoring the ValuEngine Valuation Warning and extreme overbought technical market indicators...

• The Dow Industrial Average (12,288) remains extremely overbought and closed above its weekly pivot at 12,274 testing 12,303.16. The 21-day simple moving average rises to 12,063 with today’s risky level at 12,399.
  
• The S&P 500 (1336.3) closed above its weekly pivot at 1335.6, setting a new high for the move at 1337.61. The 21-day simple moving average rises to 1306.1 with today’s risky level at 1344.4.
  
• The Nasdaq (2826) closed back above this week’s pivot at 2811 with my quarterly risky level at 2853. The 21-day simple moving average rises to 2756 with today’s risky level at 2840.
  
• Dow Transports (5286) tested and held its weekly pivot at 5206 on Tuesday, then breaks above its January 18 high at 5256.80 to 5306.54 on Wednesday. Today’s risky level is 5317.
  
• The Russell 2000 (828.37) is above its weekly pivot at 811.80 with its July 2007 high at 862.00. Today’s risky level is 837.39.

We continue to trade under a ValuEngine Valuation Warning -- Sixteen of 16 sectors overvalued with only 32.4% of all stocks undervalued on Wednesday, below the 35% threshold by this measure. This also means that 67.6% of all stocks are overvalued.
---Richard Stuttmeier, Valuengine.com, via Minyanville