Tracking The Bear Market Rally

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.

September 17, 2009 – Tracking the Bear Market Rally Tracking the Pending End to the Bear Market Correction - The major topics I have in the bull versus bear debate are pending problems in housing and financials Builder Confidence remains on the Mat - The National Association of Home Builders Housing Market Index rose to an anemic reading of 19 in September, well below the 50 neutral reading. The window for first time home buyers to file for the $8,000 tax credit is closing fast. The tax credit sets to expire at the end of November and the typical time between contract and closing is sixty days. Getting the $8,000 from Uncle Sam is also an issue. My son has been waiting since July 20th, two months and counting. Problems at major banks are far from over – One of the problems at Bank of America (BAC) is rising Credit Card defaults. The bank’s credit card charge-off rate -- loans the bank does not expect to be repaid -- rose to 14.54% in August from 13.81% in July. Wells Fargo (WFC) reports that they expect increasing unpaid mortgage-related loans, which will squeeze bank profits for the rest of 2009. At the end of June, Wells Fargo had $15.8 billion of bad loans - 1.9% noncurrent. So far the bank has taken $7.3 billion of some $41 billion in home loan losses resulting in the take-over of Wachovia. Wells Fargo faces $89 billion in Alt-A loan resets from the Wachovia book of business they obtained from their Golden West Bank acquisition. Wells commercial real estate exposure is $127 billion. Still the bank wants to repay its $25 billion in TARP – That won’t be easy. Fifth Third Bancorp (FITB) indicated that they would post an estimated $775 million in uncollectible debt for the third quarter and realize about $3.4 billion in assets that are no longer collecting interest.

Some have said that Consumer Confidence is on the rise again – Not according to the Consumer Confidence Poll done weekly by ABC. At -49 this poll is scraping bottom and 43% of Americans say the economy is getting worse and only 24% are in the mood to buy stuff. No Transparency from the FDIC - “The FDIC publishes regular reports of debt issuance under the Temporary Liquidity Guarantee Program (TLGP), including amount outstanding and type and term at issuance of FDIC-guaranteed debt instruments. The FDIC does not report names of issuers.” There is $307 billion in debt outstanding from the TLGP program, all with tax payer backing. Tracking Key Levels for Overvalued / Overbought Stocks The Dow Industrial Average – The Dow reached my zone of annual resistances at 9,750 and 10,012. Today’s resistance is 9,903. S&P 500 – This extremely overbought index traded above its Ascending Wedge resistance at 1063. Daily and weekly resistances are 1086 and 1090. The NASDAQ stayed shy of its weekly resistance at 2149 with today’s resistance at 2182. Dow Transports entered its zone of annual resistances at 4037 and 4199. 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.”