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

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http://www.valuengine.com/pub/Unsubscribe? Oct 10, 2011 The weekly charts for the major averages remain negative. Fridays closes were cheaper than the five-week modified moving averages, which keeps the weekly charts negative. The decline in the 10-Year yield is overdone on its weekly chart with my semiannual risky level at 1.672 as the yield bottom that factors in the full effect of the Feds Operation Twist. The weekly chart for gold is negative, which indicates that we have seen the years high at $1923.7 set on September 23rd. The weekly chart for crude oil is also negative with the 200-week simple moving average as a magnet at $83.60. The weekly chart for the euro versus the dollar is also negative. This week begins the Q3 earnings season with stocks extremely undervalued and with the daily technicals positive, so to me the earnings bar is set quite low. We know that twelve-month trailing EPS has been solid. We know that Wall Street had exuberant predictions for twelve month forward EPS estimates that are likely still too optimistic. The most important factor is that the yield on the 30-Year US Treasury bond, which ended September at 2.913, was 4.510 at the end of Q1 and 4.377 at the end of Q2. These metrics define the main backdrop for stocks being too cheap to ignore. 10-Year Note (2.068) Monthly, semiannual, quarterly and annual value levels are 2.222, 2.414, 2.669 and 2.690 with daily, weekly, and semiannual risky levels at 1.897, 1.776 and 1.672. My semiannual risky level at 1.672 was tested on September 23rd.

Courtesy of Thomson / Reuters

Comex Gold ($1640.6) Semiannual and annual value levels are $1469.9 and $1,356.5 with daily and semiannual pivots at $1614.8 and $1644.8, and quarterly, weekly and monthly risky levels at $1738.4, $1760.1 and $1811.4, and the September all time high at $1923.7. The 200-day simple moving average is $1534.2 with the 50-day at $1748.3 with the magnet at $1644.8.

Courtesy of Thomson / Reuters

Nymex Crude Oil ($82.89) The October 4th year-to-date low is $74.95 with a daily value level at $77.30, a weekly pivot at $82.35 with monthly, quarterly and annual risky levels at $98.51, $100.34, $99.91 and $101.92.

Courtesy of Thomson / Reuters

The Euro (1.3387) Daily and quarterly value levels are 1.3200 and 1.2598 with a weekly pivot at 1.3345, and monthly and semiannual risky levels at 1.4579, 1.4752 and 1.4872. The daily chart shows the 50-day simple moving average at 1.3979 trading below the 200-day at 1.4056 in whats called a Death Cross.

Courtesy of Thomson / Reuters

Weekly Dow - (11,103) The new YTD low is 10,404.49 with the 200-week and 120-month simple moving averages at 10,650 and 10,609, weekly and daily value levels at 10,894 and 10,768, my annual pivot at 11,491, and monthly and quarterly risky levels at 12,091 and 12,507. Semiannual value levels are 9,635 and 8,468.

Courtesy of Thomson / Reuters

S&P 500 (1155.5) The October 4th YTD low is 1074.77 with semiannual value levels at 981.3 and 855.7, weekly and daily value levels at 1137.5 and 1110.4, and annual, monthly, quarterly and annual risky levels at 1210.7, 1259.8, 1303.7 and 1562.9. NASDAQ (2479) The October 4th YTD low is 2298.89 with my annual pivot at 2335, semiannual value levels at 2199 and 2049, weekly and daily value levels at 2436 and 2354, and monthly, quarterly and annual risky levels at 2680, 2807 and 3243. NASDAQ 100 (NDX) (2203) The YTD low is 2034.92 with semiannual and annual value levels at 1951, 1861 and 1723, my weekly and daily value levels at 2171 and 2097, and monthly, quarterly and annual risky levels at 2312, 2440 and 2590. Dow Transports (4359) The October 4th YTD low is 3950.66 with my semiannual value level at 3868, my weekly, daily and semiannual pivots at 4108, 4177, and monthly, annual and quarterly risky levels at 4980, 5179 and 5359. Russell 2000 (656.15) The October 4th YTD low is 601.71 with semiannual value levels are 577.47 and 530.04, my weekly and daily value levels at 641.17 and 622.31, and monthly, annual and quarterly risky levels at 778.77, 784.16 and 802.96. The SOX (356.73) The October 4th YTD low is 322.24 with annual and semiannual value levels at 270.98, 258.97 and 204.67, my daily and weekly value levels at 329.77 and 345.74, and monthly and quarterly risky levels at 363.01 and 417.63. Equity Fundamentals Stocks are extremely undervalued. 88.1% of all stocks are undervalued / 11.9% of all stocks are overvalued. In March 2009 we saw 91.1% of all stocks undervalued. All sixteen sectors are undervalued by double-digit percentages, fourteen by 21.3% to 31.5%. Back in March 2009 the sectors were undervalued by 33% to 45%. Check out and subscribe to www.ValuEngine.com. VE Morning Briefing If you want expanded analysis of the US Capital Markets including a Fearless Prediction of the Week and a Stock of the Day go to this link and sign up: http://www.valuengine.com/nl/mainnl?nl=D ValuTrader Model Portfolio If you want to learn how to Buy and Trade use this link and sign up: http://www.valuengine.com/nl/mainnl?nl=V ETF Weekly If you want my Value Levels and Risky Levels for 30 Electronically Traded Funds use this link and sign up: http://www.valuengine.com/nl/mainnl?nl=U ValuEngine FDIC Evaluation Report In this report I slice and dice the FDIC Quarterly Banking Profile. We publish a ValuEngine List of Problem Banks in this publication: http://www.valuengine.com/nl/mainnl?nl=C Definition of MOJO This is my term for technical momentum. I use whats called 12x3x3 slow stochastic readings from daily, weekly and monthly charts. The scale is zero to 10.0 where above 8.0 is overbought and below 2.0 is oversold.

Buy and Trade Strategies for Long Positions Value Level The price at which you establish an additional long position on share price weakness. This is done on a GTC Limit Order to buy weakness to the Value Level. Risky Level The price at which you remove a single long position or reduce a multiple long position on share price strength. This is done on a GTC Limit Order to sell strength to the Risky Level. Buy and Trade Strategies for Short Positions Value Level The price at which you remove a single short position or reduce a multiple short position on share price weakness. This is done on a GTC Limit Order to buy weakness to the Value Level. Risky Level The price at which you establish an addition short position on share price strength. This is done on a GTC Limit Order to sell strength to the Risky Level. Richard Suttmeier Chief Market Strategist ValuEngine.com (800) 381-5576 To unsubscribe from this free email newsletter list, please click http://www.valuengine.com/pub/Unsubscribe? Send your comments and questions to Rsuttmeier@Gmail.com. For more information on our products and services visit www.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, and quarterly newsletters available that track a variety of equity and other data parameters as well as my most up-to-date analysis of world markets. My newest products include a weekly ETF newsletter as well as the ValuTrader Model Portfolio newsletter. You can go to http://www.valuengine.com/nl/mainnl to review sample issues and find out more about my research.

I Hold No Positions in the Stocks I Cover.