The major reason for maintaining the valuation warning is the rise in the yield of the 30-Year U.S. Treasury bond which increased by 30 basis points last week to 3.60%, a level not seen since September 2011.
Technically, last week ended with four of the five major averages having negative weekly chart profiles. The 12x3x3 weekly slow stochastic readings ended the week at; 74.07 vs. 82.40 last week for the Dow industrials, 73.13 vs. 80.38 last week for the S&P 500, 80.27 vs. 85.28 on the Nasdaq, 68.96 vs. 75.23 on Dow transports, and 78.99 vs. 82.73 last week for the Russell 2000. All readings need to be declining below 80.00 to have simultaneous negative weekly chart profiles.
The stochastic reading for the Nasdaq will be declining this week, thus all major averages will have negative weekly chart profiles given closes this week below the five-week modified moving averages at 14,988 Dow, 1615.6 S&P 500, 3395 Nasdaq, 6259 Dow transports, and 970.32 on the Russell 2000.
Negative weekly closes will confirm that the May 20/May 22 as cycle highs at; 5,542.40 Dow, 1687.18 S&P 500, 3532.04 Nasdaq, 6568.41 Dow transports and 1008.23 Russell 2000.
This week's closes are also monthly closes, quarterly closes and semiannual closes, which are projected to result in new quarterly value levels with new monthly and semiannual risky levels. My annual value levels will remain in the second half of 2013 at 12,696 Dow, 1348.3 S&P 500, 2806 Nasdaq, 5469 Dow transports and 809.54 Russell 2000.
Key stocks that have been downgraded by ValuEngine: On June 18 I wrote, Buy-Rated Dow Components Slip To Ten, and today the number slides to just eight.
General Electric ($23.36) was downgraded to hold from buy on June 21, when I wrote, Volatility Sparking as Investors React to News. My monthly value level is $21.90 with this week's risky level at $24.43.
Procter & Gamble ($77.43) has been downgraded to hold from buy over the weekend. The stock is between annual levels at $75.13 and $78.73.
Coca Cola ($39.76) continues to have a buy rating but archrival Pepsico ($80.13) has been downgraded to hold from buy. My annual value level is $77.05 with an annual pivot at $79.02, a monthly pivot at $80.26 and weekly risky level at $81.46.
The autos-tires-trucks sector joins the transportation sector with an "avoid-source of funds" rating. There are 96 stocks in the auto sector and none are rated buy. With 55 rated sell and another 11 rated strong sell, 68.8% of the stocks have sell ratings. Four were downgraded to sell over the weekend.
Johnson Controls ($35.29) has a semiannual value level at $29.87 with a monthly pivot at $37.34 and weekly risky level at $38.03.
Toyota Motor ($119.55) has annual value levels at $112.27 and $101.68 with monthly and weekly risky levels at $123.44 and $123.45.
Volvo ($13.51) has a semiannual value level at $10.53 with monthly and weekly risky levels at $14.59 and $14.96.
WABCO Holdings ($72.71) has a quarterly value level at $55.64 with weekly and monthly risky levels at $77.45 and $78.07.
At the time of publication the author held no positions in any of the stocks mentioned.
This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.