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ValuEngine.com ValuEngine, Inc is an independent research company, producing recommendations, forecasted target prices, and fair market valuations on over 5,500 equities trading on US exchanges (including over 700 international ADR's).. Research on each equity is updated every trading day to... More
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  • Banks will lead Return of the Bear 0 comments
    Jun 26, 2009 11:21 AM | about stocks: SPY

     

    Featuring Richard Suttmeier, Chief Market Strategist
     
     
    If you think that the Housing Market and Financials have bottomed think again. The homebuilders are just 4% undervalued and banking is 19.6% overvalued according to ValuEngine. The daily chart for the S&P 500 remains negative, but a return of the Bear Market has not been confirmed by the weekly chart yet.
     
    The weekly chart for the Housing Market Index (HGX) remains negative with declining momentum and with the down trend clearly shown. A close today above the five-week modified moving average at 83.43 would be a ray of hope.
     
    Courtesy of Thomson / Reuters
     
    The America’s Community Bankers Index (ABAQ) remains negative with declining momentum. A close today above the five-week modified moving average at 143.53 seems extremely unlikely. Bank failures reached 40 for the year and 65 for The Great Credit Crunch and I project 500 to 800 failures through 2011 and into 2012.
     
     
    Courtesy of Thomson / Reuters
     
    The Regional Banking Index (BKX) is well below a two year downtrend with declining momentum. The only ray of hope would be a close today above the five week modified moving average at 36.44.
     
     
    Courtesy of Thomson / Reuters
     
    The daily chart for the S&P 500 has a negative profile but is above its 50-day and 200-day simple moving averages at 901.91 and 895.68 with the 21-day as resistance at 925.48. Momentum is declining.
     
     
    Courtesy of Thomson / Reuters
     
    The weekly chart for the S&P 500 remains positive but overbought, but my reason for long term bearishness is the down trends shown. A daily close below the five-week modified moving average at 908.60 would be a warning, but I still project that strength will fail between my annual pivot at 910.8 and my annual resistance at 967.1.
     
     
    Courtesy of Thomson / Reuters
     
    If you have any comments or questions send them to Rsuttmeier@Gmail.com.
     
    Make sure to visit ValuEngine.com for more products and services, and have a great day.
    Themes: Housing, Banking, Stock Market Stocks: SPY
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