Beware Of The Ides Of October

Richard Suttmeier is the Chief Market Strategist at www.ValuEngine.com. ValuEngine is a fundamentally-based quant research firm in Princeton, NJ. ValuEngine covers over 5,000 stocks every day. A variety of newsletters and portfolios containing Suttmeier's detailed research, stock picks, and commentary can be found HERE. Suttmeier's Four in Four video can be watched on the web HERE.

October 1, 2009 – Beware of the Ides of October It’s a new month and a new quarter with many new levels from my proprietary analytics. I look at yields, commodities, housing, financials and the major equity averages. The yield on the 10-Year note For the 10-Year I show weekly, monthly and semiannual supports at 3.457, 3.677, 4.000 and 4.176 with daily resistance at 3.250. The weekly chart favors lower yields as risk aversion trumps increasing supply. Declining yields implies a flight to quality, which should limit stock market gains. Comex Gold and Copper, and Nymex Crude Oil For gold I show semiannual and monthly supports at $991.7 and $978.8 with quarterly and semiannual resistances at $1094.4 and $1,101.9. The weekly chart remains positive. Gold is both an inflation hedge and a store of value during deflation. There is also the quality of being the currency of last resort. Higher gold is another warning the upside for stocks should be limited. For copper I show my annual support at 240.20 with weekly resistance at 299.85 with an overbought weekly chart. To prove the global growth story, copper needs to breakout above the 200-week simple moving average at 291.93. For crude oil my annual pivots $68.81 and $66.51 provided key pivots yet again, but the weekly chart shows declining MOJO. My new monthly and quarterly resistances are $82.98 and $83.16, which are the targets on a weekly close above the 200-week simple moving average at $75.00. Housing and Financials The Housing Sector Index (HGX) ended Wednesday below its 50-day simple moving average at 103.66, and the weekly chart will shift to negative on a close on Friday below the five-week modified moving average at 103.01.

HGX is thus warning that alls not well in the housing market. Check out my ValuTrader Model Portfolio, which is short Ryland Group (RYL) from $24.09 on September 17th. The America’s Community Bankers Index (ABAQ) is just above its 50-day and 200-day simple moving averages at 149.21 and 147.26. A trend below would warn that more bad loans loom. The Regional Banking Index (BKX) is above its 21-day and 50-day simple moving averages at $46.39 and $44.63, and closes below that will warn that the bigger banks are also under renewed stress. My ValuTrader model portfolio is short one “too big to fail” bank and four regional banks with mixed results so far. Subscribe and find out the names. The Dow, S&P 500 and the NASDAQ As September and the third quarter came to a close my annual pivot at 9,750 was a strong magnet. Ending the quarter below that level is a warning, but the weekly chart remains positive but overbought. My new monthly support is 9,306 with the annual pivot at 9,750 and annual resistance at 10,012. For the S&P 500 bulls will not want to see a weekly close below new monthly pivot at 1033.3, as quarterly supports are down at 817 and 689. For the NASDAQ bulls want to see a weekly close above my new monthly resistance at 2183. The tug-of-war is which comes first SPX below 1033 or the NASDAQ above 2183. Send me your comments and questions to [email protected]. 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 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. I hope that you will go to www.ValuEngine.com and review some of the sample issues of my research.

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