March 18, 2011

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MARKET OVERVIEW

Index started week Thursday Close 4 day change 4 day change % ytd
DJIA 12042.13 11774.59 -267.54 -2.22% 1.70%
NASDAQ 2695.66 2636.05 -59.61 -2.21% -1.52%
RUSSELL 2000 802.81 785.52 -17.29 -2.15% -1.01%
S&P 500 1301.19 1273.72 -27.47 -2.11% 1.28%

Summary of VE Stock Universe

Stocks Undervalued 48.60%
Stocks Overvalued 51.40%
Stocks Undervalued by 20% 19.78%
Stocks Overvalued by 20% 21.84%
SECTOR OVERVIEW
Sector Change MTD YTD Valuation Last 12- P/E
MReturn Ratio
Aerospace 0.73% 0.17% 12.57% 7.20% overvalued 22.27% 17.84
Auto-Tires-Trucks 0.45% -4.01% -8.10% 3.07% overvalued 29.30% 18.55
Basic Materials 1.22% -5.98% -6.82% 6.29% overvalued 40.17% 41.94
Business Services 0.35% -3.63% -1.51% 1.84% overvalued 8.33% 46.9
Computer and Technology 0.35% -4.37% 4.79% 1.10% overvalued 24.58% 38.65
Construction 0.90% -1.80% -1.96% 5.13% overvalued 5.94% 34.61
Consumer Discretionary 0.21% -3.76% -0.72% 5.16% overvalued 12.43% 31.45
Consumer Staples 0.36% -3.78% -4.19% 3.53% overvalued 10.31% 20.4
Finance 0.85% -3.47% -0.34% 3.64% overvalued 6.34% 25.68
Industrial Products 1.19% -2.07% 0.92% 3.70% overvalued 21.52% 33.99
Medical 0.43% -1.69% 5.90% 4.75% undervalued 8.55% 36.5
Multi-Sector Conglomerates 0.25% -3.56% -2.03% 8.66% overvalued 19.95% 25.51
Oils-Energy 2.02% -1.81% 7.15% 20.96% overvalued 37.44% 44.75
Retail-Wholesale 0.19% -1.28% -0.22% 2.72% overvalued 16.58% 23.64
Transportation 0.36% -1.28% -4.46% 6.88% overvalued 15.94% 20.72
Utilities 0.78% -1.95% -0.79% 5.54% overvalued 10.96% 20.86

Sector Talk—Home Builders

More bad news for housing this week as new data shows that new housing
starts are at their lowest levels since 1974. Below, we present the latest data on the
Home Builders from our Institutional software package (VEI).

VE Last 12-M
Ticker Name Mkt Price Valuation(%)
Rating Retn(%)
AXR AMREP CORP 9.49 N/A 2 -35.09
BHS BROOKFIELD HOME 12.14 N/A 2 29.98
BZH BEAZER HOMES 4.36 -67.35 4 -11.92
CHCI COMSTOCK HMBLDG 1.31 N/A 1 50.57
COHM ALL AMERICAN GP 0.25 -87.5 3 -83.33
DHI D R HORTON INC 11.88 -18.48 3 -6.6
HOV HOVNANIAN ENTRP 3.61 -75 4 -21.01
KBH KB HOME 13 -50.56 4 -24.94
 Ticker Name Mkt Price Valuation(%) VE Last 12-M
Rating Retn(%)
LEN LENNAR CORP -A 19.29 -20.5 4 16.98
MDC MDC HLDGS 25.9 -30.02 5 -24.67
MHO M/I HOMES INC 13.56 -30.91 1 -10.26
MTH MERITAGE HOMES 23.49 -14.24 3 5.53
NVR NVR INC 749.4 2.14 3 -0.25
RYL RYLAND GRP INC 16.13 -32.78 3 -33.07
SPF STANDARD PAC 3.6 -62.74 3 -25.31
TOL TOLL BROTHERS 20.46 0.6 3 0.89

Subscribers can check out the latest valuation, forecast, and ratings figures on
the Finance Sector from our Models HERE.
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What's Hot--ValuEngine's New Benchmark Portfolio

Strategy

ValuEngine has created and tracked a variety of investment portfolio strategies

which reflect varying investment objectives. Known as “benchmark portfolio
strategies,” these strategies provide an excellent starting point for using ValuEngine's
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 We have recently added a new strategy to our website, the ValuEngine
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stocks predicted to return more than 4% over the next twelve months. Stocks meeting
these criteria with market prices over $5.00 and whose size ranking is greater than 54--
@ $1 billion in January 2011—are selected for the portfolios. An equal amount of
capital was allocated to all stocks. Portfolio size is limited to 20 stocks and fluctuates
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the standard 20 and hit a low of eight stocks in October 2007.
Below we provide some tables and charts which illustrate the potential gains
provided by this sort of approach.

Return Comparison
Last 5-Year Last 1-Year
VE Income Portfolio 115.45% 34.12%
S&P 500 3.64% 20.17%
Excess Return 111.81% 13.95%
 Statistics vs. S&P 500 Index Since 2000
VE Portfolio S&P 500
Annual Return 25.58% 1.07%
Annual Volatility 18.08% 16.31%
Sharpe Ratio 1.31 -0.05
Sortino Ratio 1.63 -0.07
Maximum Drawdown -44.94% -52.56%

Monthly Return Statistics Since 2000

Outperforming S&P 500 74.38%
Average Return 1.92%

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as well as our Current Aggressive and Diversified Growth Benchmark
Portfolio Strategy Holdings on our ValuEngine Portfolios Page HERE

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Strategy as well as our Aggressive and Diversified Growth Benchmark
Portfolio Strategies are Available on our Research Library Page HERE
--Valuation Watch is OFF
We recently called off a Valuation Watch which had been in effect since
December 15, 2010. We began our Valuation Watch with the SP 500 at 1241 and
called it off as of last Friday with the benchmark around 1275. Over the period of this
Valuation Watch, we issued Valuation Warnings whenever our overall universe
overvaluation figure exceeded 64.5%. We issued a total of 14 warnings during this
period.
Below is a chart which tracks our overvaluation calculations for the duration of
our latest Valuation Watch. Here you can see what the market did when we issued
our warnings. This is real tracked data, gathered from our website on an almost daily
basis. We issued the warnings as indicated by the red columns--these were included
in our Daily and Weekly Bulletins. The overall overvaluation calculation is represented
by the yellow line. The blue line is the SP 500 close.
 So far, we are still above the levels of December when we issued the latest
Valuation Watch--as of this writing the SP 500 is at 1284 after dipping to 1256 earlier
this week. However, with the exception of the period from February 2nd to February
22nd, the Valuation Warnings did provide a timely signal of dips--even if the market
did quickly shake off the wobbles and power back up. We will continue to watch and
track the overvaluation metric so that we may add to our dataset on this indicator.

--ValuEngine Forecast 16 Market Neutral Strategy

Newsletter Beats S&P 500 by 1000 bps
The ValuEngine Forecast 16 Market Neutral Strategy Newsletter is based on one
of our most tested and researched market approaches, the VE Diversified Growth
Benchmark Strategy. It uses our Forecast Model to provide the same sort of long-short
equity portfolio utilized by major hedge funds and institutions without the hefty
management and performance fees.
Market neutral strategy (MNS) portfolios offer the potential of decent, steady
returns in both good markets and bad. For the last three years, the ValuEngine
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benchmark portfolio strategies. The ValuEngine Diversified Growth 16 Market Neutral
Strategy Newsletter offers the investor capable of running a short side access to
increased performance with lower overall volatility and hedged risk.
 We re-balanced and published the March edition of our newsletter
yesterday. Once again the portfolio shrugged off the roiled markets and provided a
very good return in the midst of the Islamic and Japanese crises. Our Forecast 16
Market Neutral Strategy Newsletter portfolio posted a gain of 4.01% versus the S&P
500's loss of almost 6%. For the most recent re-balance period, we beat the S&P 500's
return by almost 1000 basis points!
While the S&Ps drop of almost 6% challenged our long selections, our short side
more than made up for the battered longs. We garnered double digit gains from
almost half of our picks. Barnes and Noble provided a massive 48% gain with Boyd
Gaming, ARM Holdings, Fuel System Solutions, Gannett, and Textron leading our short
side to a big 11% overall gain. This was the second month in a row where one of the
newsletter's picks provided a 48% gain.
Overall results along with short-side portfolio performance tables are below:

Standard Strategy Long-Bias MNS Short-Bias

No Stops (70-30) (60-40) (50-50) (40-60) (30-70)

50/50 Allocation
-3.28 0.37 4.01 7.66 11.31

Entry Price
Ticker Company Name Exit Price Change %Change Sector
01/17/2011
TDG TRANSDIGM GROUP 81.81 77.48 4.33 5.29 AEROSPACE
AUTO TIRES
FSYS FUEL SYSTEM SOL 28.05 23.6 4.45 15.86 TRUCKS

ANV ALLIED NEV GOLD 29.76 30.15 -0.39 -1.31 BASIC MATERIALS
BUSINESS
EM EMDEON INC-A 15.87 15.07 0.8 5.04 SERVICES
COMPUTERS
ARMH ARM HOLDNGS ADR 30.92 24.4 6.52 21.09 TECHNOLOGY

KBH KB HOME 14.64 12.71 1.93 13.18 CONSTRUCTION

CONSUMER
BYD BOYD GAMING CP 11.62 9.07 2.55 21.94 DISCRETIONARY
Ticker Company Name Entry Price Exit Price Change %Change Sector
01/17/2011
CONSUMER
GCI GANNETT INC 16.97 14.87 2.1 12.37 STAPLES

RF REGIONS FINL CP 7.76 7.2 0.56 7.22 FINANCE

INDUSTRIAL
SSYS STRATASYS INC 45.45 44.9 0.55 1.21 PRODUCTS

CLDA CLINICAL DATA 33.47 30.35 3.12 9.32 MEDICAL

MULTI-SECTOR
TXT TEXTRON INC 27.96 25.05 2.91 10.41 CONGLOMERATES

PCX PATRIOT COAL CP 25.25 23.32 1.93 7.64 OILS ENERGY

RETAIL
BKS BARNES & NOBLE 18.77 9.71 9.06 48.27 WHOLESALE

TGH TEXTAINER GROUP 35.16 34.05 1.11 3.16 TRANSPORTATION

CPN CALPINE CORP 14.43 14.82 -0.39 -2.70 UTILITIES

SHORT PORTFOLIO 11.12

GSPC S&P500 1336.32 1256.88 -79.44 -5.94

With the ValuEngine Forecast Model Market Neutral Strategy

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Newsletter
Suttmeier Says
--Commentary and Analysis from Chief Market Strategist
Richard Suttmeier
If you have any comments or questions, send them to
Rsuttmeier@Gmail.com

On Thursday, the US Capital Markets consolidated the

volatility we witnessed Monday through Wednesday. The yield on
the 10-Year US Treasury range is 3.349 to 3.139. Gold is between its
50-day simple moving average at $1380.1 and $1433.5. Crude oil
is between $96.22 and $101.99, and hit $103.66 overnight. The euro is between 1.3859
and my weekly risky level at 1.4089.

Treasury Yields
10-Year-- (3.244) Weekly, annual, and semiannual value levels are 3.634, 3.796 and
4.268 with a daily pivot at 3.206, and monthly, annual, and semiannual risky levels at,
3.002, 2.690, 2.441, and 2.322.

Commodities and Forex

Comex Gold--($1405.20) Annual, quarterly, semiannual and annual value levels are
$1356.5, $1331.3, $1300.6 and $1187.2 with daily and weekly pivots at $1392.5 and
$1404.1, and monthly and quarterly pivots at $1437.7 and $1441.7, and semiannual
risky level at $1452.6.

Nymex Crude-- ($101.49) Daily, monthly, weekly, and semiannual value levels are
$97.71, $96.43, $95.66 and $87.52 with annual pivots at $99.91 and $101.92, and
semiannual and quarterly risky levels at $107.14 and $110.87.

The Euro-- (1.4018) My quarterly value level is 1.3227 with a daily pivot at 1.3898, and
weekly, semiannual and monthly risky levels at 1.4046, 1.4089, 1.4624 and 1.4637.

Key Levels for the Major Equity Averages

• The Dow Industrial Average (11,775) My annual value level is 11,491 with a
daily pivot at 11,792, and weekly and monthly risky levels at 12,400 and 12,741.
A close on Friday below 11,856 will pull momentum (12x3x3 weekly slow
 stochastic) below 8.0, which to me is the confirmation of a cycle high. On
February 18th this reading was 9.5. My first downside objective is my annual risky
level at 11,491. Given a close in March below 11,491 the downside is to
semiannual value levels at 10,959 and 9,449

• The S&P 500 (1273.7) My annual value level is 1210.7 with my quarterly pivot at
1262.5, my daily pivot at 1272.9, and weekly and monthly risky levels at 1327.3
and 1381.3. A weekly close below 1284 shifts the weekly chart profile to
negative.

• The NASDAQ (2636) My daily pivot is 2630 with weekly, quarterly and monthly
risky levels at 2753, 2853 and 2926. Semiannual and annual value levels are
2363, 2335 and 2172.

• The NASDAQ 100 (NDX) (2225) My daily pivot is 22216 with weekly, quarterly,
and monthly risky levels at 2333, 2438 and 2499. Semiannual value levels are
2006.8 and 1927.6.

• Dow Transports (5019) My quarterly value level is 4671 with a weekly pivot at
4995, and daily and annual pivots at 5109 and 5179.

• The Russell 2000 (785.22) My quarterly value level is 765.50 with daily and
annual pivots at 785.67 and 784.16, and a weekly pivot at 805.37, and monthly
risky level at 850.79. Semiannual value levels are 631.62 and 567.74.

• The Philadelphia Semiconductor Index (SOX) (417.97) My daily value level is

404.04 with weekly, monthly and quarterly risky levels at 447.74, 453.89 and
465.93. Semiannual and annual value levels are 296.89, 270.98 and 259.30.

With Richard Suttmeier's ValuTrader Newsletter Portfolio, you get timely

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