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 8, 2009 – Stretching the Bear Market Rally

Yields, the dollar, gold, copper and crude oil – convoluted logic continues. Stocks are
ripe to challenge the September 23rd highs. We will soon find out how much
camouflage paint regional banks have when they begin to report quarterly results next
week. Charts courtesy of Thomson / Reuters
If you are bullish on the US economy and stocks yields should be rising, not falling.
The weekly chart for the yield on the 10-Year favors lower yields, but weekly resistance at
2.95 should limit the yield decline as the chart will soon show that the yield decline is
overdone.
The daily chart shows that the decline in yields failed at the 200-day simple moving average
following the weak employment data last Friday. The 10-Year yield needs a close below the
200-day, now at 3.15.
If the decline in yields stops between 3.15 and 2.95 the risk is to monthly support at 3.677.
The Dollar Index hits a new 52-week low of 75.68 getting the stock market Bulls fresh
lather.
The dollar versus Japanese yen is well above its 52-week low of 87.15 and the euro and
British pound are not at 52-week highs, so dollar weakness is not across all crosses.
Look at the weekly chart for the Dollar Index and you see an up trend connecting the lows of
April and July 2008. This support is between 74 and 75 with the Index extremely oversold with
MOJO at 1.6.

Comex gold continues its breakout, but is becoming overbought on its weekly chart.
At this point gold is not worth chasing as the upside for this move should be limited to my
quarterly and semiannual resistances at $1094 to $1102, where profits should be taken.
Comex copper and Nymex crude oil still doubt the global growth story.
The weekly chart for copper shows the metal below its 200-week simple moving average at
292.27 with MOJO declining below the overbought reading of 8.0.
The weekly chart for crude oil shows Texas Tea below its 200-day at 75.07 since mid-June
with MOJO declining with a reading at 6.8.
Right or wrong, a weak dollar has been pushing US stocks higher.
For the Dow, my annual pivot at 9,750 continues as a magnet with the September 23rd high at
9,918. My monthly support is 9,306 with annual resistance at 10,012.
For the S&P 500, holding the 21-day simple moving average at 1052.65 targets the
September 23rd high at 1080.15, as the Bear Market Rally can stretch to the daily up trend at
just below 1100.
The NASDAQ lags its September 23rd trading range of 2130.34 to 2167.70 despite the weak
dollar. This is a sign that the weak dollar, strong stocks is starting to diverge. Holding my
weekly pivot at 2101 indicates potential strength to monthly resistance at 2183, which takes
out the key reversal levels.

I am not altering my longer-term bearish view, but showing the divergences as the convoluted
bullish consensus continues to defy fundamental logic.
Next week three key regional banks will put on their camouflage paint for Q3 earnings
results.
JP Morgan (JPM) reports Wednesday morning pre-market. Citigroup (C) reports Thursday
morning, and Bank of America (BAC) on Friday. Goldman Sachs (GS) also reports on
Thursday.
Send me your comments and questions to Rsuttmeier@Gmail.com. 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.”