Richard Suttmeier's  Instablog

Richard Suttmeier
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I am the Founder & CEO at Global Market Consultants, Ltd. I consider myself as a Financial Engineer with an engineering degree from Georgia Tech and a Master of Science degree from Brooklyn Poly. In 1972 I began my career in the financial services industry trading U.S. Treasury securities in the... More
My company:
Global Market Consultants
My blog:
valuengine.com/ve/ma...
  • Fed Policy Gives Traders An Extended License To Speculate! 0 comments
    Jan 26, 2012 6:29 AM | about stocks: TLT, GLD, DIA, QQQ, SPY
    The FOMC announced that the Federal Funds Rate will remain at zero to 0.25% though at least late 2014. The Fed warns of significant downside risks from global financial stress. The Fed still describes the housing market as depressed. THE FOMC IS PLAYING RISKY GAMES. Savers on Main Street are getting the shaft for at least another three years, while homeowners on Main Street cannot negotiate a mortgage rate at 100 basis points above the 10-Year yield. These low rates allow Wall Street to rebuild speculative positions. Fundamentally, ValuEngine shows stocks less attractive as 63.4% of all stocks are undervalued versus 93.5% on October 4th. Fifteen of sixteen sectors are undervalued with Medical undervalued by 13.7% and Retail-Wholesale slightly overvalued. The dynamics remain the same for the major equity averages with the Dow Industrials, S&P 500 and NASDAQ above their quarterly pivots at 12,478, 1305.4 and 2777 and the Transports and Russell 2000 below their quarterly risky levels at 5448 and 829.03. The yield on the 10-Year note approached my semiannual risky level at 1.903 and is below its 50-day simple moving average at 1.961 percent this morning. Gold took out my semiannual pivot at $1659.4, which targeted my monthly pivot at $1706.7 with my quarterly risky level at $1740.9. Crude oil is trading around my quarterly pivot at $99.87. The euro versus the dollar is above my semiannual pivot at 1.2980 and its 50-day at 1.3087.

    10-Year Note - (2.003) My annual value level is 2.502 with a daily pivot at 2.020, and semiannual, quarterly, monthly and semiannual risky levels at 1.902, 1.687, 1.409 and 1.385.

    Courtesy of Thomson / Reuters

    Comex Gold - ($1710.9) Semiannual, weekly, annual and weekly value levels are $1659.5, $$1635.8, $1613.2, $1575.8, $1388.4 and $1569.2 with daily and monthly pivots at $1691.5 and $1706.7, and my quarterly risky level at $1740.9.

    Courtesy of Thomson / Reuters

    Nymex Crude Oil - ($99.73) Semiannual and monthly value levels are $79.83 and $75.53 with my quarterly pivot at $99.87, and daily, weekly, semiannual and annual risky levels at $100.58, $101.47, $104.84, and $103.58 and $117.00.

    Courtesy of Thomson / Reuters

    The Euro - (1.3020) Weekly, monthly and quarterly value levels are 1.2783, 1.2780 and 1.2499 with semiannual and daily pivots at 1.2980 and 1.3045, and annual and semiannual risky levels at 1.4239 and 1.4405.

    Courtesy of Thomson / Reuters

    Daily Dow: (12,759) Quarterly, annual, monthly and semiannual value levels are 12,478, 12,312, 11,210, 8,425 and 8,336 with quarterly and daily risky levels at 12,796 and 12,802, the May 2, 2011 high at 12,876, and weekly and annual risky levels at 13,391 and 14,032.

    .

    Courtesy of Thomson / Reuters

    S&P 500 - (1326.1) Quarterly, monthly and semiannual value levels are 1305.4, 1152.8, 841.7 and 829.9 with a daily pivot at 1327.5, and quarterly, annual, weekly and annual risky levels at 1331.7, 1363.2, 1383.5 and 1562.9. The May 2, 2011 high is 1370.58.

    NASDAQ - (2818) Quarterly, annual, monthly and semiannual value levels are 2777, 2698, 2432, 2012 and 1952 with daily, quarterly, weekly and annual risky levels at 2829, 2849, 2894 and 3232. The May 2, 2011 high is 2887.75.

    NASDAQ 100 (NDX) - (2466) Quarterly, annual, monthly and semiannual value levels are 2422, 2300, 2185, 1851 and 1743 with daily, quarterly, weekly and annual risky levels at 2479, 2471, 2521 and 2603.

    Dow Transports - (5282) Monthly and semiannual value levels are 4443, 4407 and 3778 with a daily pivot at 5270, and quarterly, weekly and annual risky levels at 5448, 5543, 5861 and 6111. The all time high was set at 5627.85 on July 11, 2011.

    Russell 2000 - (795.57) Monthly and semiannual value levels are 646.71, 572.90 and 510.81 with a daily pivot at 793.62, and quarterly, annual, weekly and annual risky levels at 824.46, 829.03, 836.15, 839.23 and 969.09. The all time high was set at 868.57 on May 2, 2011.

    The SOX- (416.45) Quarterly, monthly, annual and semiannual value levels are 390.17, 310.48, 269.80, 277.90 and 194.47 with my weekly pivot at 416.67, and daily, quarterly and annual risky levels at 421.64, 423.32 and 520.61. The 2011 high is 474.33 set on February 18, 2011.

    ValuEngine Valuation Model - Stocks are not cheap enough to chase MOJO.
     

    • 63.4% of all stocks are undervalued / 36.6% of all stocks are overvalued. On October 4th - 93.5% of all stocks were undervalued.
    • Fifteen of sixteen sectors are undervalued, only one is undervalued by double-digit percentages (Medical by 13.7%). Retail-Wholesale is fractionally overvalued. Back in March 2009 the sectors were undervalued by 33% to 45%. - Check out and subscribe to www.ValuEngine.com.

    VE Morning Briefing - If you want expanded analysis of the US Capital Markets including a Fearless Prediction of the Week and a Stock of the Day go to this link and sign up: http://www.valuengine.com/nl/mainnl?nl=D

    ValuTrader Model Portfolio - If you want to learn how to "Buy and Trade" use this link and sign up: http://www.valuengine.com/nl/mainnl?nl=V

    ETF Weekly - If you want my Value Levels and Risky Levels for 30 Electronically Traded Funds use this link and sign up: http://www.valuengine.com/nl/mainnl?nl=U

    ValuEngine FDIC Evaluation Report - In this report I slice and dice the FDIC Quarterly Banking Profile. We publish a ValuEngine List of Problem Banks in this publication: http://www.valuengine.com/nl/mainnl?nl=C The December FDIC report with complete analysis of the Q3 Quarterly Banking Profile is now available. I track the continuing slow improvement to the housing market and banking system, but recognize that we are not out of the war.

    ValuEngine Capital Management - Over the years many of my readers have asked for investment help based upon ValuEngine and my technical analysis expertise. This is now possible through VE Capital Management LLC. If you are a Registered Investment Advisor looking for new products to offer to your clients, let me know. If you have any questions, please respond to this email.

    Definition of MOJO - This is my term for technical momentum. I use what's called "12x3x3 slow stochastic readings" from daily, weekly and monthly charts. The scale is zero to 10.0 where above 8.0 is overbought and below 2.0 is oversold.

    Buy and Trade Strategies for Long Positions
     

    • Value Level - The price at which you establish an additional long position on share price weakness. This is done on a GTC Limit Order to buy weakness to the Value Level.
    • Risky Level - The price at which you remove a single long position or reduce a multiple long position on share price strength. This is done on a GTC Limit Order to sell strength to the Risky Level.

    Buy and Trade Strategies for Short Positions
     

    • Value Level - The price at which you remove a single short position or reduce a multiple short position on share price weakness. This is done on a GTC Limit Order to buy weakness to the Value Level.
    • Risky Level - The price at which you establish an addition short position on share price strength. This is done on a GTC Limit Order to sell strength to the Risky Level.

    Richard Suttmeier
    Chief Market Strategist

    ValuEngine.com
    (800) 381-5576

    To unsubscribe from this free email newsletter list, please click http://www.valuengine.com/pub/Unsubscribe?

    Send your comments and questions to Rsuttmeier@Gmail.com. For more information on our products and services visit ValuEngine.com

    As Chief Market Strategist at ValuEngine Inc, my research is published regularly on the website 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. You can go to http://www.valuengine.com/nl/mainnl to review sample issues and find out more about my research.

    "I Hold No Positions in the Stocks I Cover."

    Stocks: TLT, GLD, DIA, QQQ, SPY
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