Fuzzy Math For Tarp And Conservatorship

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 and ForexTV Markets Review can be watched on the web HERE.

December 8, 2009 – Fuzzy Math for TARP and Conservatorship Fuzzy Bailout Math for TARP and Conservatorship of Fannie and Freddie. US Treasuries face supply test. Gold bubble could be popping. Nymex crude oil trickles lower. Stocks still poised for breakout or breakdown. Fuzzy Math from the Bank Bailouts Congress authorized the Treasury Department to spend $700 billion in TARP and another $400 billion for Fannie Mae and Freddie Mac in Conservatorship. Propublica.org reports that $452.6 billion has been announced and / or distributed from the $700 billion TARP to 727 recipients. More than 400 got federal money after President Obama’s inauguration. The Conservatorship of Fannie Mae & Freddie Mac – So far $110.6 billion has been allocated versus the $400 billion allocated ($200 billion for each).

At President Obama’s inauguration the total for the two programs was $318 billion, which means that $245 billion money has been allocated under the Obama Administration. It’s hard to believe that Treasury secretary Geithner and Fed Chairman Bernanke say that these bailouts will make money for US taxpayers. Conservatorship alone will cost nearly $1.4 trillion and counting. The daily chart for the 10-Year yield favors higher yields. My semiannual support is 4% with a weekly pivot at 3.446, daily resistance at 3.357, and the 200-day simple moving average at 3.316. Charts courtesy of Thomson / Reuters

Supply is tested the next three days with $40 billion 3-Year notes auctioned today, $21 billion 10-Year notes tomorrow and $13 billion 30-Year bonds on Thursday. My semiannual pivot is 1.265 on the 3Year. The daily chart for gold shows declining MOJO with quarterly support at $1135, my weekly pivot at 1179 and today’s resistance at $1199.

The daily chart for crude oil shows declining MOJO with oil below its 50-day simple moving average at 76.32. My annual pivot is $68.81 with the 200-day simple moving average at $64.90.

The weekly chart for the dollar index shows rising MOJO and a close this week above the five-week modified moving average at 75.95 shifts the weekly chart profile to positive. This week’s support is 74.86 with quarterly resistance at 78.65. The euro remains below 1.50, the dollar versus yen trades around a weekly pivot at 90.12 and the British pound is shy of 1.65. The Major Equity Averages – Tracking the Breakout or Breakdown – Today it’s a coin toss. For the Dow today’s support is 10,362 with a weekly pivot at 10,442 and the multi-year bear market down trend at 10,550.

The S&P 500 shows a weekly pivot at 1097.6. The NASDAQ remains below its 200-week simple moving average at 2210 with semiannual resistances at 2227 and 2296. Transports are between my annual pivot at 4037 and annual resistance at 4199. The SOX is trading around my semiannual pivot at 337.39. 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.

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Richard Suttmeier Chief Market Strategist www.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.”