confirming weekly key reversals

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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 webHERE.

February 5, 2010 Confirming Weekly Key Reversals

Tracking the weekly key reversals for the Dow and S&P 500! Weakness in semiconductors andthe China 25 Fund. The euro, gold and crude oil show continued weakness. Risk aversion pulls10-Year yields lower. Regional banks are the only group I follow thats still in the green for theyear. Comparing ValuEngine Valuations as 2010 began versus today.

The weekly charts for the Dow and S&P 500 are poised to confi rm weekly key reversals.

Subscribers to the ValuEngine Morning Briefing know that every Monday I present My FearlessPrediction of the Week. This week it was that the Dow would trade below 10,000, which it did onThursday.

The Dow needs to close below last weeks close of 10,067 to confirm the weekly key reversal, whichoccurred three weeks ago. If we get this signal the downside risk is to quarterly support at 6,705.Todays resistance is 10,109 with weekly and annual resistances at 10,341 and 10,379. If we do not

confirm the key reversal it is likely that weekly support will form next week to slow the market decline.

Chart Courtesy of Thomson / Reuters


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The Dow had its negative moving average crossoverwith the 21-day simple moving average at10,407 below the 50-day at 10,425. Another key is that both are declining.

The S&P 500 needs to close below last weeks close at 1073 to confirm its weekly key reversal. SPXneeds a weekly close below my annual support at 1014 to target quarterly support at 682. Todaysresistance is 1073.


We need two months of lower closes to confirm the Monday Key Reversals for the Dow, S&P 500,the NASDAQ and Dow Transports.

Al l other major averages have confi rmed weekly key reversals .

The Philadelph ia Semiconductor Index (SOX) is the number one stock market drag down 13.2%year to date. The risk is to my semiannual support at 271.90.



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The China 25 Fund (FXI) was touted as a 2010 leader by Wall Street and its down 10% year to date.Weekly closes below my annual pivot at 39.25 indicates continued downside risk. Remember when myETF subscribers had the opportunity to sell strength to my annual risky level at $44.53.


The daily chart for the euro is in a near free fall with this weeks support at 1.3658. It was back on

Thanksgiving when I projected that euro gains above 1.50 would not be sustained. The focus issovereign debt issues in Greece, Spain and Portugal just for starters.



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The stronger dollar replaces gold as currency of last resort.This weeks support is $1043 andbeing long gold has been a crowded trade and margin calls have forced position liquidations.


As long as weekly closes for crude oi l are below my annual pivot at $77.05 the risk is to myquarterly support at $67.22. Weakness in oil is caused by the unwinding of speculative positions and onthe notion that the global recovery is not as strong as Wall Street proclaims.

The yield on the 10-Year is declining as risk aversion rules in front of next weeks $81 billion inauctions. My semiannual pivot is 3.675 with monthly resistance at 3.504.

The Regional Banking Index (BKX) which was up 8.2% year to date yesterday morning got hit hardand is now only up 3.5% so far in 2010. BKX shifts to neutral on a weekly close below $45.33. Mysemiannual support is $40.76.



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Ten of eleven sectors were overvalued at the 2010 highs and now only two are overvalued.Thiswas a major reason why I said that stocks were vulnerable and to sell strength.


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Send me your comments and questions to [email protected]. For more information on ourproducts and services visit www.ValuEngine.com

Thats todays Four in Four. Have a great day.

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Richard SuttmeierChief Market Strategistwww.ValuEngine.com(800) 381-5576

As Chief Market Strategist at ValuEngine Inc, my research is published regularly on the website www.ValuEngine.com. Ihave daily, weekly, monthly, and quarterly newsletters available that track a variety of equity and other data parameters aswell as my most up-to-date analysis of world markets. My newest products include a weekly ETF newsletter as well as theValuTrader Model Portfolio newsletter. I hope that you will go towww.ValuEngine.com and review some of the sampleissues of my research.

I Hold No Positions in the Stocks I Cover.

confirming weekly key reversals

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