The Dow is between its 50-day at 11,020 and annual pivot at 11,235

8/8/2019 The Dow is between its 50-day at 11,020 and annual pivot at 11,235.

http://slidepdf.com/reader/full/the-dow-is-between-its-50-day-at-11020-and-annual-pivot-at-11235 1/5

Richard Suttmeier is the Chief Market Strategist at www.ValuEngine.com. ValuEngine is a fundamentally-based quant research firm in Newtown, PA. ValuEnginecovers over 7,000 stocks every day.

A variety of newsletters and portfolios containing Suttmeier's detailed research, stock picks

and commentary can be found at http://www.valuengine.com/nl/mainnl

November 23, 2010 – The Dow is bet w een i t s 50-day at 11,020 and annual p ivot at

11,235.

The yield on the 10-Year note is trading around my annual pivot at 2.813 with my annual valuelevel at 2.999 and my weekly risky level at 2.656. Gold trades between its 50-day simple movingaverage at $1338.0 and my monthly pivot at $1373.0. Crude oil is between my annual value leveat $77.05 and my semiannual pivot at $83.94 with a weekly value level at $78.51. The euroremains oversold and flipping back and forth around its 50-day at 1.3709. The Dow is above its50-day at 11,020 with annual and semiannual pivots at 11,235 and 11,296 and this week’s riskylevel at 11,405. Home Builders want to increase inventories. Bernanke defends QE2. Otherhousing and banking data!

10-Year Note – (2.806) Annual and daily levels are 2.999 and 3.002 with my annual pivot at 2.813,and weekly, monthly, quarterly and semiannual risky levels at 2.656, 2.380, 2.265 and 2.249.

Courtesy of Thomson / Reuters



Comex Gold – ($1365.5) Daily, quarterly, semiannual and annual value levels are $1322.7, $1306.4,$1260.8, $1218.7 and $1115.2 with monthly and weekly risky levels at $1373.0 and $1412.1.


Nymex Crude Oil – ($81.63) Monthly, daily and annual value levels are $78.51, $78.22 and $77.05my semiannual pivot at $83.94, and weekly, semiannual and annual risky levels at $89.06, $96.53 and

$97.29.




The Euro – (1.3620) Daily, quarterly and monthly value levels are 1.3455, 1.3318 and 1.2709 withweekly and semiannual risky levels at 1.4205 and 1.4733.


Daily Dow: (11,179) Daily, monthly, semiannual, annual and quarterly value levels are 10,965, 10,84810,558, 10,379 and 8,523 with annual, semiannual, and weekly risky levels at 11,235, 11,296, and11,405.




Home Builders want to Increase Inventories - According to the National Association of HomeBuilders the annual production of single-family homes in 2008 and 2009 were a million short of what’sneeded in a normal economy. In my opinion the home builders have a window of opportunity to

increase sales as perspective home buyers shun the foreclosure sale market, which is in disarray. Theproblem is that community banks, which fund construction and development loans, remain stuck withnon-performing loans, and thus do not want to lend new money to the home builder community.

Republican Leaders Grilled Bernanke on QE2 - Republicans in Congress say that the $600 billionFed program to jump-start the economy will ignite inflation and invite speculative buying on WallStreet. In my opinion “the Great Credit Crunch” began with the overbuilding of new homes, as flippersnever took title, but simple ran up prices in a bubble induced by the ridiculous low interest rate policyof the Federal Reserve. So far, QE2 has not addressed the issue of getting money to the homebuilders to pick up the shovels and begin to complete some of the sparely populated communities onMain Street, USA. QE2 must filter down to Main Street with money at lower interest rates, andaccording to the NAHB that’s not happening.

The anticipation of QE2 inflated bubbles in commodities prices, hurt the US dollar, but then on theevent of QE2 US Treasury yields are higher, commodities are consolidating and the Dow fell from justunder 11,500 to just under 11,000, setting up a 500 point trading range, as we await evidence thatQE2 will work. I don’t see it and believe that the risks totally out-weight the rewards.

Bernanke told Congress that QE2 will create 700,000 jobs over two years. Back in 2008, thenTreasury Secretary Hank Paulson said that the Bush Stimulus would create 500,000 jobs by the end othat year. Then President Obama claimed that his $788 billion stimulus would create or salve three tofour million jobs. We’ve been down this road before and it’s a dead end.

The Fed supplies billions to the banking system who are reluctant to lend to borrowers who are afraidto take on more debt. With all 50 state attorney’s general leaning on banks with regard to theforeclosure mess, banks face fines and the risk of having to buy back mortgage backed securitieslaced with bad mortgage loans. This is an environment where QE2 can’t possibly work, but could helpWall Street reap the benefits on speculation that QE2 will work. I say its time to replace Bernanke!

Adding to the Mess The Federal Reserve wants Fresh Stress Tests - Can the “too big to fail”banks weather another recession? That’s what the Fed wants to know, and banks that pass this testcan boost dividends to investors. The bigger banks face increased Deposit Insurance Fundassessments from the FDIC, and still face some uncertainties from the new Financial Reformregulations.

The Mortgage Foreclosure Situation - The Mortgage Bankers Association reports that 9.1% ofhomeowners have missed at least one mortgage payment in the July-September quarter down from9.9% in the April-June period. At these levels delinquencies and foreclosures remain elevated andshould stay that way as unemployment remains elevated and home values decline.

The Status Obama’s Foreclosure Prevention Programs - The program was aimed at helping threeto four million troubled homeowners, but only 1.4 million actually enrolled. Of these 755,000borrowers, or 54% left the program without even a trial mortgage modification. Only 36,500homeowners received permanent loan modifications and are making their reduced mortgagepayments on time.



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

Richard Suttmeier

Chief Market StrategistValuEngine.com(800) 381-5576

Send your comments and questions to [email protected]. For more information on our products and services visitwww.ValuEngine.com

As Chief Market Strategist at ValuEngine Inc, my research is published regularly on the website www.ValuEngine.com. I have daily, weekly, monthly, andquarterly newsletters available that track a variety of equity and other data parameters as well as my most up-to-date analysis of world markets. Mynewest products include a weekly ETF newsletter as well as the ValuTrader Model Portfolio newsletter. You can go HERE to review sample issues andfind out more about my research.

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

Documents

The Dow is between its 50-day at 11,020 and annual pivot at 11,235