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September 25, 2009 – The Multi-Year Bear Market Appears Ready to Return

Declining yields point to risk aversion, commodities fail to breakout, the rollover of
housing and financials, and the key reversal survives a second day.
The weekly chart for the yield on the 10-Year US Treasury favors lower yields, but monthly
resistance at 3.223 is a formidable barrier. This week’s pivot has been a magnet at 3.367.
Risk aversion has been trumping huge supply.
Commodities fail to breakout despite the weak dollar
The weekly chart for Comex Gold is positive, but the price rise has been held back by monthly
and semiannual pivots at $994.1 and $991.7.
Rally attempts to take out the March 2008 high of $1033.9 has been blocked by weekly and
daily pivots at $1002.5 and $1,014.3. Semiannual resistance is $1,102.9.
The weekly chart for Comex Copper is overbought as rally attempts fail between its 200-week
simple moving average at $291.48 and monthly resistance at 295.88.
A weekly close below the five-week modified moving average at 272.45 will shift the weekly
chart to negative with declining MOJO targeting my annual pivot at 240.20.
The weekly chart for Nymex Crude Oil shifts to negative on a close today below my annual
pivot at $68.81. The 200-week simple moving average at $74.96 has been the barrier since
mid-June.
Weak copper and crude oil in the face of a weak dollar is a strong challenge to the global
growth story.
Housing and banking are leading the return of the multi-year bear market
The Housing Sector Index (HGX) peaked at 116.81 on September 17th, and is now below its
21-day simple moving average at 107.97. With the daily chart negative the key support is the
50-day at 102.06.
The America’s Community Bankers index (ABAQ) peaked at 158.75 back on August 10th.
Community banks are the source of bank failures, and today is Bank Failure Friday.
ABAQ is down 20.9% year to date and sits just above the 50-day and 200-day simple moving
averages, which are important supports at 148.29 and 147.85.
The Regional Banking Index (BKX) has been lagging the major averages, up just 4.9% year
to date. The BKX peaked at $48.94 on September 17th within my $46.50 to $50.50 resistance
zone.
If the BKX closes below its 21-day simple moving average at $46.43 the next support is the
50-day at $43.83.
The daily and weekly charts for the Dow industrial Average
The daily chart for the Dow will lose its overbought status today or Monday. A lower close
today confirms Wednesday’s key reversal day. A close below the 21-day simple moving
average at 9,600 will be the first warning that the multi-year bear market has returned.
The weekly chart for the Dow remains overbought with a MOJO reading of 9.2. It will take a
weekly close below the five-week modified moving average at 9,456 before this chart
confirms the return of the bear.
It seems like the Dow will confirm a peak between my annual levels at 9,750 and 1,012.
Send me your comments and questions to Rsuttmeier@Gmail.com. For more information on
our products and services visit www.ValuEngine.com
That’s today’s Four in Four. Have a great day.

Richard Suttmeier
Chief Market Strategist
ValuEngine.com
(800) 381-5576

As Chief Market Strategist at ValuEngine Inc, my research is published regularly on the website
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