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 and ForexTV Markets Review can be watched on the web
HERE.

December 2, 2009 – Multi-Year Bear Market Testing Key Resistance

The S&P 500 tested its down trend that connects the highs going back to October 2007 with the
Dow about 100 points away. The multi-year bear market is close to an end technically, but I
explain why it’s not a new bull market. The 10-Year yield is still below its 200-day simple moving
average. The Dollar Index remains above its weekly pivot, and the totem pole remains for
equities.
The weekly chart for the S&P 500 is testing “Snake Eyes.”
If the S&P makes a clear move above 1111 it would be above the down trend that connects the highs
going back to October 2007. Charts courtesy of Thomson / Reuters

The risk / reward profile is not favorable as my annual pivot is 967.1 with weekly resistance at 1133.
The Dow remains positive but overbought on its weekly chart with a daily pivot at 10,373 today. The
five-week modified moving average is lower support at 10,090. Ascending Wedge Resistance is 10,612
with down trend resistance at 10,581, and weekly and monthly resistances at 10,685 and 11,035.

I do not view the breaking of the down trends as a new bull market as the overall risk / reward is
between my quarterly support at 6,550 and semiannual resistance at 11,500.
I can not blindly buy ValuEngine BUY rated stocks because of unfavorable one year price targets.
Take Apple Inc (AAPL) for example – The stock is rated a BUY according to ValuEngine with fair value
at $242.50, which makes the stock 17.6% undervalued versus it’s fair value price.
Fair Value is where the stock could trade at in an ideal world. However, the ValuEngine Forecast Model
shows 7% downside risk over the next twelve months. There are many fine buy rated companies with a
similar profile, which indicates that stocks have outrun their projections given economic uncertainties.
When stocks are not cheap you cannot have a new bull market.
The yield on the 10-Year Treasury remains below its 200-day simple moving average.
Risk aversion remains as long as the 10-Year yield stays below its 200-day simple moving average,
now at 3.307. This yield was above the 200-day since May 18th until last week. Today’s resistance is
3.217.

Comex gold reached another new all time high at $1218.4 this morning as the parabolic bubble
continues to inflate. My weekly pivot is $1200.4. When a market goes parabolic you don’t know how
high it can go.
The Dollar Index remains just above this week’s pivot at $74.26. Below is risk to monthly support at
$70.62, which would intensify the dollar carry trade and continue inflating the parabolic bubble for gold.
If $74.26 holds the upside is to my quarterly resistance at $78.65.
The Totem Pole for Equities remains from the SOX to the Dow.
The SOX is the base of the totem pole being well below a double-top at 337, which was a failed test of
my semiannual resistance on September 26th and October 17th. The SOX lead all indices to the upside
bottoming in November 2008. Other indices did not bottom until March. This week’s pivot is 317.67.
The Russell 2000 has a double top at 624 / 625 set on September 26th and October 24th. The
Transports have failed several tests between annual resistances at 4037 and 4199 since Sept. 19th.
The NASDAQ has stayed below its 200-week simple moving average at 2211.
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.

Check out the latest Forex TV’s Markets Review.

http://www.forextv.com/Forex/Video/Video.jsp?channel=41,276,1241,249,1314,1418,1423,1424,1445&movieid=57867

Richard Suttmeier
Chief Market Strategist
www.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.”