new monthly risky levels stretch upside potential

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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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May 2, 2011 New Mont hly Risky Levels Str etc h Upside Pote nt ia l

The stock market is operating under a ValuEngine Valuation Watch with 61.8% of all stocks

overvalued. We will issue a ValuEngine Valuation Warning when 65% of all stocks becomeovervalued. The last warning occurred on February 18th and was followed by a pullback of 6.7%on the Dow Industrial Average and 8.3% on the NASDAQ. All sixteen sectors are overvalued,eight by double-digit percentages. The Dow Industrial Average is overbought technically ondaily, weekly and monthly charts. Volatility should increase in May as the range is widebetween my annual value level at 11,491 and this months risky level at 13,663. This weeksvalue level at 12,574 reflects increased volatility in both directions. The death of Osama binLaden has extended stock strength as the first week of May begins.

10-Year Note (3.288) Monthly, annual and quarterly value levels are 3.757, 3.796 and 4.016 withdaily and weekly pivots at 3.308 and 3.292, and annual, and semiannual risky levels at 2.690, 2.441,and 2.322. The 200-week simple moving average at 3.520 is the trend towards lower yields.

Courtesy of Thomson / Reuters


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Comex Gold ($1562.0) Gold rallied $56.1 the Troy ounce last week thanks to the Fedscontinued easy money policy. Weekly, quarterly, semiannual and annual value levels are $1523.5,

$1523.7, $1452.6 and $1356.5 with a daily pivot at $1548.1, and my monthly risky level at $1589.3.Gold tested another new all time high overnight at $1577.4.


Nymex Crude Oil ($113.70) While Wall Street gains on oil speculation, Main Street gets stuckwith the bill at the gas pump. Semiannual, annual and monthly value levels are $107.14, $101.92,$101.09 and $99.91 with a weekly pivot at $112.82, and daily, monthly and quarterly risky levels at$116.94, $119.17 and $120.52.



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The Euro (1.4814) Semiannual and quarterly value levels are 1.4624 and 1.4308 with a weekly pivoat 1.4782, and daily and weekly risky levels at 1.5064 and 1.5144. The euro is below 2008 and 2009

highs lagging the gains in commodities and stocks. That difference is Wall Street speculation.


Weekly Dow: (12,811) The weekly chart shows overbought MOJO and is thus positive with the Dowabove its five-week modified moving average at 12,373. This weeks value level is 12,574 withmonthly, quarterly and annual risky levels at 13,663, 13,774 and 13,890. My annual value level lags at

11,491. Theres lots a room for a volatile month between 11,491 and 13,890, with the October2007 all time high at 14,198.10.



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S&P 500 (1363.6) Weekly and annual value levels are 1332.7 and 1210.7 with daily, monthly,quarterly and annual risky levels at 1385.1, 1490.5, 1500.4 and 1562.9. The October 2007 high is at

1576.06.NASDAQ (2873) Weekly, semiannual and annual value levels are 2772, 2363 and 2335 with daily,quarterly, monthly and annual risky levels at 2938, 3209, 3228 and 3243. The NASDAQ is above itsOctober 2007 high, which was 2861.51.

NASDAQ 100 (NDX) (2404) My weekly value level is 2305 with daily and annual risky levels at 2475and 2590. The NASDAQ is above its November 2007 high, which was 2239.23.

Dow Utilities (429.06) Weekly and semiannual value levels are 420.56 and 397.84 with daily,monthly and quarterly risky levels at 432.42, 432.28 and 448.17.

Dow Transports (5515) My annual value level is 5179 with a weekly pivot at 5516, and daily,

monthly, annual and quarterly risky levels at 5560, 6028, 6131 and 6148. Transports traded aboveits May 2008 high at 5536.57, but did not end the week above that milestone at 5536.57.

Russell 2000 (865.28) Weekly and annual value levels are 846.16 and 784.16 with daily, quarterly,monthly and annual risky levels at 879.77, 949.02, 968.82 and 978.58. The small cap index is aboveits July 2007 high, which was 862.00.

The SOX (449.56) My weekly value level is 414.19 with daily, quarterly, monthly and annual riskylevels at 466.13, 498.75, 527.94 and 531.14. The SOX is well below its July 2007 high at 549.39.

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 8.0

is overbought and below 2.0 is oversold.

Thats todays Four in Four. Have a great day.

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 awell as my most up-to-date analysis of world markets. My newest products include a weekly ETF newsletter as well as the

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I Hold No Positions in the Stocks I Cover.

new monthly risky levels stretch upside potential

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