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Richard Suttmeier
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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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  • New Month, New Quarter, New Semiannual Levels Published Today 0 comments
    Jul 1, 2009 8:40 AM | about stocks: TLT, GLD, DUG, DJ, SPY

     

    Featuring Richard Suttmeier, Chief Market Strategist
     
     
    Welcome to ValuEngine’s “Four In Four”. I’m Richard Suttmeier, Chief Market Strategist.
     
    Today I present my new monthly, quarterly and semiannual levels from my proprietary analytics. I talk about Consumer Confidence, or lack thereof, and the continued slide in home prices.
     
    Up first are the key levels for the yield of the 10-Year, Comex gold, and Nymex crude oil.
     
    For the 10-Year yield I show new semiannual supports at 4.00 and 4.18 with daily resistance at 3.36.
     
    For gold there are plenty of resistances above $1,000 the Troy ounce – Semiannual at $992 and $1,102, monthly at $1,102, and quarterly at $1,117. Those are the targets on monthly closes above the annual pivot at $891. Annual support remains at $740.
     
    For oil new monthly support is $40.46 with my annual pivots at $66.51 and $68.81, weekly resistance at $78.91, and semiannual and quarterly resistances at $95.78 and $96.89.
     
    The key levels for the major equity averages – The Dow, S&P 500 and the NASDAQ.
     
    For the Dow, quarterly and monthly supports lag at 7,681 and 7,087 with weekly resistance at 8,810. Annual resistances remain at 9,750 and 10,012.
     
    For the S&P 500, new quarterly and monthly supports are 786.1 and 762.1 with my annual pivot at 910.8 and annual resistance at 967.1. New quarterly resistance is 998.3.
     
    For the NASDAQ, new quarterly and monthly supports are 1571 and 1536 with weekly and quarterly resistances at 1858 and 1923.
     
    Consumer Confidence came in a weaker than expected 49.3 in June, which is a wilting “green shoot.”
     
    Waning confidence is a sign that the US economy is not set for growth by the end of 2009. Consumer Confidence needs to be 90 to become neutral, and above 120 to signal economic expansion.
     
    The Present Situation Index slid to 24.8 from 29.7. Americans saying jobs are "hard to get" increased to 44.8% from 43.9%, while those saying jobs are "plentiful" slid to just 4.5% from 5.8%.
     
    Finally, I discuss the continued slide in home prices
     
    The first chart shows that month over month declines are decelerating, which could be construed as a contradiction by Robert Shiller whose name is on the S&P Case-Shiller Home Price Index.
     
    In commenting on the Index Doctor Shiller indicated that there is a clear trend that home price declines are moderating, and hence the housing market is stabilizing.
     
    In recent comments however, Shiller indicated that the decline in home prices should continue right through 2010 citing that the recovery from the 1990 / 1991 home price decline did not happen until 1997.
     
    Right now sales of homes are getting a modest boost from the $8,000 first time homebuyer tax credit. This program will end in about three months, while the ranks of the unemployed continue to rise.
     
    As shown in the second chart home prices are back to the levels of 2003. The S&P / Case-Shiller index of 20 City Index tumbled by 18.1% year over year, but eight metro areas saw modest price gains in April sequentially.
     
    A housing market recovery will be slow at best. The 20-city index is off 33% from its peak in mid-2006, which means home values are now around 2003-levels.
     
    The chart shows significant additional price pressures to get the index back to the 100 watermark.
     
    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.
     
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