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

ValuEngine is a fundamentally-based quant research firm in Newtown, PA. ValuEngine

covers over 7,000 stocks every day.

A variety of newsletters and portfolios containing Suttmeier's detailed research, stock picks,
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November 8, 2010 – QE2 Hurts Main Street at the Gas Pump

Despite QE2 the yield on the 10-Year note appears to be forming an inverse head and
shoulders pattern, as yields rise when inflation expectations become a problem. Treasury
supply will be a test this week. QE2 has gold at an all time high last week at $1398.7 just above
last week’s risky level. Crude oil traded above its May 3rd high at $87.15 thanks to QE2 with the
price at the gasoline pump up about a dime since Wednesday’s QE2 announcement. The euro
traded to a new high for the move at 1.4281 last Thursday. The Dow Theory Buy Signal has the
Dow above my semiannual pivot at 11,296 with this week’s risky level at 11,650. Bank Failure
Friday brings the total failures for 2010 up to 143 above last year’s 140 failures. Check out
ValuEngine’s new sixteen sectors.
10-Year Note – (2.538) Annual and annual value levels are 2.813 and 2.999 with a daily pivot at
2.565, and monthly, weekly, quarterly and semiannual risky levels at 2.380, 2.332, 2.265 and 2.249.

Courtesy of Thomson / Reuters

Comex Gold – ($1394.9) Quarterly, semiannual and annual value levels are $1306.4, $1260.8,
$1218.7 and $1115.2 with monthly and daily pivots at $1373.0 and $1385.9, and weekly risky level at
$1438.1. The weekly chart shows gold overbought.

Courtesy of Thomson / Reuters

Nymex Crude Oil – ($87.08) Quarterly, monthly and annual value levels are $83.94, $78.51 and
$77.05 with daily and weekly pivots at $85.87 and $86.51, and semiannual and annual risky levels at
$96.53 and $97.29.
 Courtesy of Thomson / Reuters

The Euro – (1.4035) Quarterly and monthly value levels are 1.3318 and $1.2709 with a daily pivot at
1.4135, and weekly and semiannual risky levels at 1.4879 and 1.4733. The weekly chart shows the
euro overbought.

Courtesy of Thomson / Reuters

Weekly Dow: (11,444) Weekly MOJO has become extremely overbought and this week’s risky level is
11,650. The five-week modified moving average is 10,987 with the 200-week simple moving average
at 10,963. My semiannual and annual pivots are 11,296 and 11,235 with monthly, semiannual and
annual value levels at 10,848, 10,558 and 10,379.

Courtesy of Thomson / Reuters

Bank Failure Friday – The FDIC closed four more community banks last Friday. The total number of
failures for 2010 is now 143 on the way to my predicted range of 150 to 200 for 2010. There are now
16 failures so far in the fourth quarter.
The FDIC Deposit Insurance fund has now been drained by $1.4 billion in the fourth quarter to date,
which brings the DIF Deficit to an estimated $19.0 billion. The FDIC has already burned through the
assessments for 2010. The assessments for 2011 and 2012 have been pre-paid at $15.33 billion per
year.
During “The Great Credit Crunch” the FDIC only closed 25 banks during all of 2008. In 2009 the FDIC
picked up the pace with 140 bank failures with a peak of 50 in the third quarter of 2009. So far in 2010
the FDIC closed 41 banks in the first quarter, another 45 in the second quarter, 41 for the third quarter
and 16 for the fourth quarter for a total of 143 year to date. The total for “The Great Credit Crunch” is
up to 308 continuing its path to my predicted 500 to 800 by the end of 2012 into 2013.
The four failed banks last Friday had extreme overexposures to C&D and CRE loans. C&D exposures
for the four overexposed were between 164% and 843% versus the 100% regulatory guideline. The
CRE exposures were between 700% and 1673% versus the 300% of risk-based capital regulatory
guideline. The CRE loan pipelines were between 83% and 98% funded versus a healthy pipeline of
60%. Almost all publicly traded bank failures have been on the ValuEngine List of Problem
Banks.
ValuEngine goes to Sixteen Sectors from Eleven - Check out www.ValuEngine.com for new Sector
and Industry designations. In an effort to bring our Sector and Industry designations in line with
standard financial industry assignments, we have partnered with Zacks Investment Research, a world
leader in fundamental financial data. Effective immediately, our stocks are classified as part of 16
overall sectors containing 289 individual industry groups.
We have implemented our new data feed over the weekend, so you will notice a change in the number
of stocks in a given sector or industry group as well as some fluctuations in certain data points--such
as sector and industry valuations, performance, comparables, and ratings data. This change should
make our valuation, forecast, and ratings services more useful as the sector and industry groupings
will be more akin to similar designations found on Bloomberg and other financial data service
providers.
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 and services visit
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