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,
and commentary can be found at http://www.valuengine.com/nl/mainnl

February 23, 2011 – Home Prices Continue to Decline as Expected

My number one theme for 2011 is that “home prices will resume the decline that began in mid-2006”.
The S&P Case-Shiller Home Price Indices for December 2010 support my view that home prices can
gravitate to the levels that persisted in 1999 into 2000, which is about 30% lower from current levels.
The S&P / Case-Shiller Home Price Index – The US National Home Price Index declined 3.9% in the
4th quarter of 2010 versus the 3rd quarter, and down 4.1% year over year. The 20-City Composite
declined 1% in December versus November and down 2.4% year over year. Home prices are
approaching their 2009 lows.
The US Capital Markets are on Edge Because of Libya
It’s not just about the PIIGS countries in Europe, it’s also about the Middle East and Northern Africa as
these BELTY countries are in the midst of revolts of different severities; Bahrain, Egypt, Libya, Tunisia
and Yemen. Don’t forget the protests in some of our State capitals as Governors attempt to rain in
budget deficits.
The 10-Year Yield – (3.466) This yield tested and held my annual value level at 3.791 on February
10th and is approaching its 50-day simple moving average at 3.442, on a renewed flight to quality. My
weekly pivot is 3.529.
Comex Gold – ($1398.5) Tested $1411.5 on Tuesday versus my monthly risky level at $1412.4. The
low for the move was $1307.7 on January 28th and above my semiannual value level at $1300.6.
Penetrating and holding my annual pivot at $1356.5 was the catalyst for higher prices as gold appears
positioned to rise towards quarterly and semiannual risky levels at $1412.4, $1441.7 and $1452.6.
Nymex Crude Oil – ($95.26) The contract spiked to $98.48 versus my annual risky levels at $99.91
and $101.92. Strength catapulted my semiannual and monthly pivots at $87.52 and $91.83. My
semiannual and quarterly risky levels are $107.14 and $110.87.
The Euro – (1.3654) My quarterly value level is 1.3227 with daily and weekly risky levels at 1.3444
and 1.3868.
ValuEngine Valuation Warning - A ValuEngine Valuation Warning occurs when more than 65% of all
stocks in the ValuEngine universe are calculated to be overvalued. On Friday 68.6% of all stocks were
overvalued, which was the highest of the year. Today 63.9% of all stocks are overvalued.
The Technical Warning - All major equity averages ended last week with extremely overbought
conditions noted on their weekly charts. Even with Tuesday’s weakness the daily charts are also
overbought at least for one more day.
• This week’s pivots at 12,401 Dow Industrials, 1345.0 SPX, 2831 NASDAQ, 2405.1 NDX,
414.82 Utilities, 5241 Dow Transports, and 815.37 Russell 1000 and 483.39 SOX provided
barriers and magnets on Tuesday.
Key Levels for the Major Equity Averages
• The Dow Industrial Average (12,213) The 21-day simple moving average rises to 12,131 with
daily and weekly risky levels at 12,298 and 12,401.
• The S&P 500 (1315.4) The 21-day simple moving average rises to 1314 with daily and weekly
risky levels at 1337.3 and 1345.0. The 50-day is 1285.0.
• The NASDAQ (2756) Under the 21-day simple moving average at 2771 is the 50-day at 2719.
Daily, weekly and quarterly risky levels are 2817, 2831 and 2853.
• The NASDAQ 100 (NDX) (2323) Under the 21-day simple moving average at 2343 is the 50-
day at 2291. My monthly value level is 2234.74 with daily, weekly and quarterly risky levels at
2382.3, 2405.10 and 2438.3.
• Dow Transports (5093) Is below the 21-day and 50-day simple moving averages are 5142 and
5132. My monthly value level is 4962 with my annual pivot at 5179 and weekly pivot at 5241.
• The Russell 2000 (812.96) My quarterly value level is 765.50 with my weekly pivot at 815.37
and daily risky level at 836.03.
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
www.ValuEngine.com
As Chief Market Strategist at ValuEngine Inc, my research is published regularly on the website www.ValuEngine.com. I have daily, weekly, monthly, and
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“I Hold No Positions in the Stocks I Cover.”