still no bond bubble as crude oil breaks out

8/8/2019 Still no Bond Bubble as Crude Oil Breaks Out

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Richard Suttmeier is the Chief Market Strategist at www.ValuEngine.com.ValuEngine is a fundamentally-based quant research firm in Newtown, PA. ValuEnginecovers over 7,000 stocks every day.

A variety of newsletters and portfolios containing Suttmeier's detailed research, stock

picks, and commentary can be found HERE.

September 30, 2010 St i l l no Bond Bubble as Crude Oi l Break s Out

The 10-Year yield tested my annual pivot at 2.813 on September 13 th and this week came within

20 basis points of my semiannual risky level at 2.249. Gold traded as high as $1316.2 thismorning versus this weeks risky level at $1320.4. Crude oil has broken out above my annualpivot at $77.05. The euro is extremely overbought and reached a new high for the move at1.3671 this morning. The Dow remains overbought on its daily chart, but the trend is towardsmy annual risky level at 11,235 by Election Day. Todays risky level is 10,941. The 30-year fixedrate mortgage rate is at 4.38, but it should be lower.

10-Year Note (2.506) Annual and annual value levels are 2.813 and 2.999 with monthly, quarterlyand weekly pivots at 2.563, 2.495 and 2.477, and daily and semiannual risky levels at 2.378 and2.249.

Courtesy of Thomson / Reuters


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Comex Gold ($1311.3) Monthly, semiannual, quarterly and annual value levels are $1263.8, 1260.8$1218.7, $1140.9 and $1115.2 with daily and weekly risky levels at $1320.5 and $1320.4.


Nymex Crude Oil ($77.84) Monthly, weekly and quarterly value levels are $74.45, $72.93 and$56.63 with my annual pivot at $77.05, and daily and semiannual risky level at $78.33 and $83.94.



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The Euro (1.3626) My weekly value level is 1.2986 with a daily risky level at 1.3810. Quarterly andmonthly value levels are 1.2167, 1.1721 and 1.1424 with semiannual risky level at 1.4733.


Daily Dow: (10,835) Semiannual, weekly, annual, monthly and quarterly value levels are 10,558,10,547, 10,379, 10,164 and 7,812 with daily and annual risky levels at 10,974 and 11,235. My annualrisky level at 11,235 was tested at the April 26thhigh of 11,258.01.



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Update on the so-called Bond Bubble - I am not in the bond bubble camp! The decline in the 10-Year yield reached 2.419 on August 25th then rose to 2.849 into September 13th holding my annual

pivot at 2.813. Today the 10-Year yield is trying to return to 2.419, so we are again within 20 basispoints of my semiannual risky level at 2.249.

The 30-Year fixed rate mortgage has dropped to 4.38, but this is not spurring demand for mortgageloans either for refinancings or for purchases. In my opinion this rate is just not low enough. At 4.38 thmortgage rate is 191 basis points above the yield on the 10-Year note. When the Federal Reservestopped buying Fannie Mae and Freddie Mac mortgage securities back on March 31st the spread was

just 115 basis points. At 115 BPs the 30-year fixed rate mortgage rate would be 3.32%, which wouldcertainly help spur activity in the housing market.

Mortgage Rates are not the only issue - Another issue is that banks are having difficulty in findingpotential home buyers who can qualify for a mortgage. After nearly three years of The Great Credit

Crunch about one-third of Americans now have a credit score deemed to low by lenders. In addition,buyers are not asked to make a down payment of 20%, sometimes 30%. At issue is that bothborrowers and lenders worry that home prices will continue to slide. My prediction is a slide of 30%through 2014.

Whats the Future for the Dow? The Dow is still overbought on its daily chart and will begin Octoberoverbought on its weekly chart and approaching its 200-week simple moving average at 10,994 withmy annual risky level at 11,235. With the monthly chart likely to be neutral at the end of September itseems more likely that the Dow will be in a trading range between the April 26th high of 11,258 and theJuly 2nd low of 9,615. Keep in mind that I was bullish on July 1st and again on September 8th when mytheme became Dow 11,235 by Election Day. Todays closes will determine new monthly and quarterlylevels from my proprietary analytics, and will project whether or not the Dow can get to 8,500 before11,500.

Thats todays Four in Four. Have a great day.

Richard SuttmeierChief Market StrategistValuEngine.com(800) 381-5576

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

As Chief Market Strategist at ValuEngine Inc, my research is published regularly on the website www.ValuEngine.comI have daily, weekly, monthly, and quarterly newsletters available that track a variety of equity and other data parameters awell 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. You can go HERE to review sample issues and find out more about my research.

I Hold No Positions in the Stocks I Cover.

still no bond bubble as crude oil breaks out

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