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Richard Suttmeier is the Chief Market Strategist at www.ValuEngine.com.

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September 1, 2010 – The Miss-interpretation of economic data.

The yield on the 10-Year US Treasury continues to trade around my quarterly pivot at 2.495. A
new monthly pivot is 2.562 with my semiannual risky level at 2.249. Gold is trekking towards its
all time high at $1266.5 set on June 21st with my semiannual and monthly risky levels at
$1260.8 and $1263.8. Crude oil has a new monthly pivot at $74.45. The euro remains below its
50-day simple moving average at 1.2789. The Dow shows a new monthly pivot at 10,164 for
September with today’s value level at 9,876. The miss-interpretation of economic data.
10-Year Note – (2.477) Monthly and weekly value levels are 2.562 and 2.648 with daily and quarterly
pivots at 2.508 and 2.495 and my semiannual risky level at 2.249. My annual value levels are 2.813
and 2.999. Note that the decline in yield is no longer overdone on the daily chart.

Courtesy of Thomson / Reuters


Comex Gold – ($1249.8) Semiannual, weekly, quarterly and annual value levels are $1218.7,
$1211.5, $1140.9 and $1115.2 with a daily pivot at $1244.5, and semiannual and monthly risky levels
at $1260.8 and $1263.8. Note that gold is still overbought on its daily chart.

Courtesy of Thomson / Reuters

Nymex Crude Oil – ($71.75) My daily pivot is $71.71 with a monthly pivot at $74.45, and annual,
weekly and semiannual risky levels at $77.05, $81.35 and $83.94. Note that crude oil is no longer
oversold on the daily chart profile.

Courtesy of Thomson / Reuters


The Euro – (1.2678) Daily, quarterly and monthly value levels are 1.2556, 1.2167, 1.1721 and 1.1424
with weekly and semiannual risky levels at 1.3170 and 1.4733. Note that the euro is still oversold
on its daily chart.

Courtesy of Thomson / Reuters

Daily Dow: (10,015) Daily and quarterly value levels are 9,876 and 7,812 with a monthly pivot at
10,164, and annual, semiannual, weekly and annual risky levels at 10,379, 10,558, 10,904 and
11,235. My annual risky level at 11,235 was tested at the April 26th high of 11,258.01. Note that
the daily chart remains oversold with the 21-day, 50-day and 200-day simple moving averages
at 10,335, 10,261 and 10,452.

Courtesy of Thomson / Reuters


The Miss-Interpretation of Economic Data:
The Case-Shiller Home Price Indices showed a modest improvement in home prices in June, but
the data is influenced by residual effects of the home buyer tax credits, which are over. Home prices
are back to where they were seven years ago according to Case-Shiller. The 20-City Composite was
down 32.6% from mid-2006 to April 2009 and despite a modest rebound since than home prices
remain 28.4% below their peak.
• Keep in mind that that home foreclosures remain high and that the July and August readings
for builder confidence declined. Existing Home Sales plunged 27.2% in July and New Home
Sales slumped 12.4% in July.
• Recent surveys show that home sellers are cutting their offering prices by 10% in some areas
of the country.
• In many community home Appraised Values are significantly lower year-over-year. In my
community in Tampa Bay appraisals were down 28% from April 2009 to April 2010 and
another 10% since then.
The Conference Board’s Consumer Confidence came in better than expected at 53.5, which is a
miserable reading considering that the neutral range for this date is 90 to 120. The TV media tried to
paint this data as a sign that the consumer is making a comeback, but bouncing around between 50
and 60 is meaningless as the consumer remains entrenched in the spending dumps.
The FDIC says that the Banking System is on the mend given data from its second quarter
Quarterly Banking Profile. This is misleading when you analyze the devils in the details.
• The FDIC list of Problem Banks jumped to 829 from 775 with 45 bank failures in the second
quarter up from 41 in the first quarter.
• Total Assets in the banking system declined by $136.2 billion sequentially to $13.22 trillion.
Since peaking in the fourth quarter or 2008 the banking system as lost $622.7 billion in assets.
• Commercial Real Estate Loans including Construction & Development Loans declined $44.34
billion sequentially with Other Real Estate Loans setting another record high of $49.3 billion.
• The banking system needs to de-leverage even more considering that the Notional Amount of
Derivative Contracts increased another $7.365 trillion to $225.4 trillion at the end of the second
quarter. Since “The Great Credit Crunch” began at the end of 2007 the Notional Amount of
Derivative Contracts have increased $60.65 trillion.
That’s today’s Four in Four. Have a great day.

Richard Suttmeier
Chief Market Strategist
ValuEngine.com
(800) 381-5576

Send your comments and questions to Rsuttmeier@Gmail.com. For more information on our products
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As Chief Market Strategist at ValuEngine Inc, my research is published regularly on the website www.ValuEngine.com.
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“I Hold No Positions in the Stocks I Cover.”

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