Layoffs Slowing but 27 States Show Higher Unemployment

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

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March 29, 2010 – Layoffs Slowing but 27 States Show Higher Unemployment

Some say that non-farm payrolls will rise by 350,000 in March. President Obama Expands Aid toHomeowners yet again. Treasuries, Comex Gold, Nymex Crude Oil and the Euro! The MajorEquity Averages!

Some say that non-farm payrolls will rise by 350,000 in March with the unemployment ratedeclining to 9.5%. This does not jive with Initial Jobless Claims, which remain well above the RecessionThreshold of 350,000, and with 27 states reporting higher unemployment. Only seven states reported adecline in their unemployment rate. I am not arguing that statistically the labor market is stabilizing, butit’s a far cry from creating enough jobs to support the Q4 2009 GDP growth of 5.6%. My state, the Stateof Florida reported this weekend a record unemployment rate of 12.2%.

President Obama Expands Aid to Homeowners yet again. It seems like whenever the ObamaAdministration tampers with attempting to help homeowners avoid foreclosure, the situation gets worse.

Why not, those on the cusp of making the decision to pay their mortgage or not, may be encouragednot to, because help is on the way.

The President wants banks to reduce mortgage principal and is re-iterating unlimited taxpayer supportfor Fannie Mae and Freddie Mac, with $14 billion also pledged to the FHA programs. This is in a face ofupwardly revised estimates from Realty Trac, which projects 4.5 million foreclosures in 2010, up from2.8 million on 2009. This reality is hurting the housing market, and I have been predicting a double-dipin housing, which will hurt community and regional banks around the country.

The new plan provides payments to lenders that modify second mortgages, which have been dealbreakers in the current programs. Mortgages would be refinanced into FHA guarantee programs if thesum of both the first and second liens, are no more than 115% of the homes value.

The program would also help unemployed homeowners by reducing mortgage payments for three tosix months during the search for a new job. If a job is found at a lower salary, a new mortgage will benegotiated in the hopes that the homeowner can keep the home. Why didn’t our Government support my “Mortgage Mulligan” program I recommended back in February 2008?

There is a growing backlog of distressed homeowners and a problem with the programs is thatborrowers who get mortgage relief go into re-default. To me this is an indication that home prices are noyet low enough for Americans who have to adjust to a higher cost of living. According to Case-Shillerhome prices are 50% higher today than at the beginning of the 21st Century. Today, 25% of allhomeowners are underwater on their mortgages, and it’s tough to have the courage to stay current ona mortgage when neighbors are not.



10-Year Note – Semiannual support is 4.25 with daily and weekly pivots at 3.855 and 3.810, andsemiannual and monthly resistances at 3.675 and 3.477.

Courtesy of Thomson / Reuters

Comex Gold – Annual support is $938.7 with quarterly and daily pivots at $1084.9 and $1083.4, myannual pivot at $1115.2, and weekly, semiannual and monthly resistances at $1129.8, $1139.7, $1186.5and $1195.4.




Nymex Crude Oil – Annual, weekly and quarterly supports are $77.05, $76.87 and $67.22 withmonthly and daily pivots at $80.05 and $80.29, and weekly, quarterly, annual and semiannualresistances at $84.91, $85.21, $97.29 and $97.50.


The Euro – Weekly and daily supports are 1.3301 and 1.3203 with quarterly and monthly resistancesat 1.4327 and 1.4504.




The Major Equi ty Averages

26-Mar YTD 31-Dec Cycle Cycle Date of % High % Off % Of

Market Price Gains Price Lows Highs Highs To Lows Lows Highs

The Dow 10,850.00 4.0% 10,428.00 6,469.95 14,198.10 Oct-07 -54.4% 67.7% 23.6%

S&P 500 1,166.60 4.6% 1,115.10 666.92 1,576.06 Oct-07 -57.7% 74.9% 26.0%

Nasdaq 2,395.00 5.6% 2,269.00 1,265.52 2,861.51 Oct-07 -55.8% 89.3% 16.3%

Utilities 376.36 -5.4% 398.01 288.66 555.71 Jan-08 -48.1% 30.4% 32.3%

Transports 4,340.00 5.9% 4,100.00 2,134.21 5,536.57 May-08 -61.5% 103.4% 21.6%

Russell 2000 678.97 8.6% 625.39 342.59 862.00 Jul-07 -60.3% 98.2% 21.2%

Semis (SOX) 362.89 0.8% 359.91 167.55 549.39 Jul-07 -69.5% 116.6% 33.9%

Dow – Annual support is 10,379 with weekly and daily resistances at 10,927 and 10,938. Annual andsemiannual resistances are 11,235, 11,442 and 11,949.

S&P 500 – Annual support is 1014.2 with daily, weekly and annual pivots at 1173.6, 1178.8 and 1179.0,and semiannual resistances at 1194.6 and 12,811.

NASDAQ – Semiannual and annual supports are 2258 and 2250 with semiannual and daily pivots at2392 and 2411, and weekly resistance at 2445. Annual support is 1659.

Dow Utilities – Weekly support is 370.20 with a daily pivot at 375.82 and monthly resistance at 391.82.Annual and semiannual resistances are 456.73, 471.95 and 492.05.

Dow Transports – My annual pivot is 4324 with a daily pivot at 4369, and weekly and semiannualresistances at 4440 and 4488. Annual and semiannual resistances are 4955 and 5218.

Russell 2000 – My semiannual pivot is 673.50 with daily and weekly resistances at 683.40 and 695.37.Semiannual and annual resistances are 717.69, 723.54 and 748.99.

The SOX – Semiannual support is 358.89 with daily and weekly resistances at 367.70 and 378.08.Semiannual and annual supports are 271.90, 259.45 and 241.05.

New monthly and quarterly levels will be published on April 1, 2010.

That’s today’s Four in Four. Have a great day.

Richard SuttmeierChief Market Strategistwww.ValuEngine.com (800) 381-5576

As Chief Market Strategist at ValuEngine Inc, my research is published regularly on the website www.ValuEngine.com. Ihave daily, weekly, monthly, and quarterly newsletters available that track a variety of equity and other data parameters aswell as my most up-to-date analysis of world markets. My newest products include a weekly ETF newsletter as well as theValuTrader Model Portfolio newsletter. I hope that you will go to www.ValuEngine.com and review some of the sampleissues of my research.

“I Hold No Positions in the Stocks I Cover.”

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Layoffs Slowing but 27 States Show Higher Unemployment