8/6/2019 Last weeks 648 point Dow rally shifts the fundamentals to over-valued from fairly-valued.

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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.

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Ju ly 5 , 2011 Las t w eeks 648 po in t Dow ra l ly sh i f t s t he fundamen t a l s t o ove r-va lued f rom fa i r ly -va lued .

In Fridays Four In Four report I stated that the risk / reward for July and the second half ofthe year could be huge. What this means is that the low in the second half of 2011 could bebelow the first half low, and the second half high could be above the first half high. For the DowIndustrial Average my annual value level remains at 11,491 with this months risky level at13,155. Back on May 2 nd I said that the next 1000 points would be down. The Dow declined from12,876 on May 2 nd to 11,863 on June 15 th . Then in recent weeks I have been showing a weeklyup trend holding.

10-Year Note (3.186) Weak US Treasury auctions and the end to QE2 were catalysts for the yield onthe 10-Year note to rise by 32 basis points last week. The weekly chart shows the 200-week simplemoving average at 3.441 as the yield down trend support. If you connect the lows you have a yield uptrend. The record low yield at 2.016 occurred in Dec 2008, which is when the Federal Reserve cut thefunds rate to 0 to %. Yields have been rising since then. My annual value level is 3.791 with daily,quarterly and weekly risky levels at 3.106, 3.052 and 2.957.

Courtesy of Thomson / Reuters

8/6/2019 Last weeks 648 point Dow rally shifts the fundamentals to over-valued from fairly-valued.

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Comex Gold ($1486.9) The weekly chart is negative with weekly closes below the five-weekmodified moving average at $1508.7. Semiannual, daily and annual value levels are $1469.9, $1464.9

and $1356.5 with weekly and monthly risky levels at $1537.2 and $1547.9. We need a weekly close inJuly above $1547.9 to inflate the bubble further as semiannual and quarterly risky levels are $1644.8and $1655.1.

Courtesy of Thomson / Reuters

Nymex Crude Oil ($94.68) My daily value level is $93.35 with a weekly pivot at $96.28. My annualpivots are $99.91 and $101.9 with quarterly, semiannual and monthly risky levels at $102.40, $103.93,$107.90 and $113.37. A close in July below the five-month modified moving average at $96.25 shifts the monthly chart profile to negative. The 200-week SMA is $83.58.

Courtesy of Thomson / Reuters

8/6/2019 Last weeks 648 point Dow rally shifts the fundamentals to over-valued from fairly-valued.

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The Euro (1.4528) Daily, weekly, monthly and quarterly value levels are 1.4357, 1.4326, 1.4133, and1.3728 with semiannual and annual risky levels at 1.4752, 1.4872, 1.6367 and 1.7312. The 200-week

SMA is support at 1.4019. My best guess is that the downside risk for the euro exceeds the upside potential in the second half of 2011.

Courtesy of Thomson / Reuters

Weekly Dow: (12,583) The weekly chart is neutral with declining MOJO and a weekly close above thefive-week modified moving average at 12,270. My weekly and annual value levels are 11,974 and11,491 with monthly, quarterly and annual risky levels at 13,155, 13,839 and 13,890. A break of the up trend at 11,907 indicates risk to the 200-week simple moving average at 10,792.

Courtesy of Thomson / Reuters

8/6/2019 Last weeks 648 point Dow rally shifts the fundamentals to over-valued from fairly-valued.

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S&P 500 (1339.7) Daily, weekly, annual and semiannual value levels are 1309.6, 1280.4, 1210.7,981.3 and 855.7 with monthly, quarterly and annual risky levels at 1422.8, 1467.0 and 1562.9.

NASDAQ (2816) Daily, weekly, annual and semiannual value levels are 2773, 2663, 2335, 2199 and2049 with daily, monthly, quarterly and annual risky levels at 2975, 3109 and 3243.

NASDAQ 100 (NDX) (2361) Daily, weekly, semiannual and annual value levels are 2323, 2220,1951, 1861 and 1723 with monthly, annual and quarterly risky levels at 2483, 2590 and 2630.

Dow Transports (5548)Daily, weekly, annual and semiannual value levels are 5427, 5193, 5179,4335 and 3868 with monthly, quarterly and annual risky levels at 5736, 6112 and 6131.

Russell 2000 (840.04) Daily, weekly, annual and semiannual value levels are 827.01, 799.61,784.16, 577.47 and 530.04 with monthly, quarterly and annual risky levels at 924.95, 930.83 and978.58.

The SOX (419.11) Daily, weekly, annual and semiannual value levels are 409.46, 388.97, 270.98,258.97 and 204.67 with monthly, quarterly and annual risky levels at 482.54, 493.22 and 531.14.

Equity Fundamentals end the First Half of 2011 NEUTRAL 46.9% of all stocks are undervalued / 53.1% of all stocks are overvalued. Only two sectors are undervalued Basic Materials by 4.1% and Construction by 4.0%. Fourteen sectors are overvalued Transportation by 17.2% and Multi-Sector Conglomerates by

26.1%. P/E Ratios are elevated 19.2 times for Aerospace to 56.2 times for Oils-Energy.

Definition of MOJO This is my term for technical momentum. I use whats called 12x3x3 slowstochastic readings from daily, weekly and monthly charts. The scale is zero to 10.0 where above 8.0is overbought and below 2.0 is oversold.

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

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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 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. You can go to http://www.valuengine.com/nl/mainnl to review sample issuesand find out more about my research.

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