raised earnings bar gives the bear the edge in round seven

8/14/2019 Raised Earnings Bar Gives the Bear the edge in Round Seven

1/4

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.

Januar y 12, 2010 Raised Earnings Bar Gives the Bear the edge in Round Seven

I Handicap this weeks key earnings reports. Treasury yields face $74 billion in auctions todaythrough Thursday. Daily charts for gold, crude oil and the dollar. The Dow Bull and Bear beginRound Seven of the Title Bout. Update on Emerging Markets and China.

Alcoa (AA) traded to a 52-week high at $17.60 on Monday before getting hit after the earnings reportin after hours trading. In Mondays ValuEngine Morning Briefing I said, It appears that a positiveearnings report is built into this chart pattern. My annual pivot is $15.97 with a monthly pivot at $16.46.Wall Street Hype was wrong - Alcoa reported that they did not see any improvement in thedemand for their products.

KB Home (KBH) should stay below my monthly risky level at $17.86. ValuEngine has a one year pricetarget at $13.73. Remember when the homebuilders were trading below book value? Not today as thestock trades at 2.29 times book, which is not cheap enough given housing market uncertainties.

Intel Inc (INTC) traded as high as $21.27 in reaction to its third quarter earnings three months ago,then faded to $18.31 into November 3rd. The stock is back up near that 52-week high for Thursdaysfourth quarter earnings report. Intel rates a BUY according to ValuEngine and is 11.4% undervalued,but the forecasting model shows risk to $19.69 over the next twelve months. My annual value level is$16.47 with monthly risky level at $22.11.

JP Morgan (JPM) is the first of the Big Four Banks to report and they do so Friday morning. The stockis rated a BUY according to ValuEngine but is 12.7% overvalued. My semiannual value level is $41.57with monthly risky level at $48.01. Earnings should be solid due to the zero percent funds rate. This willcamouflage continued rising credit card defaults and bad mortgage loans, and the risks hidden in theirindustry high generation of derivative contracts. Toxic assets remain off balance sheet.

Treasury supply faces a $74 billion supply test over the next three days: $40 billion 3-Year notestoday, $21 billion in 10-Year notes tomorrow and $13 billion in 30-Year bonds on Thursday.

The yield on the 10-Year should continue to trade between my monthly support at 3.868 and mysemiannual resistance at 3.675 as a weekly pivot at 3.769 should be a magnet this week. Risk aversionremains a factor balancing inflation concerns, increasing supply and reduced overseas demand.


2/4

Chart Courtesy of Thomson / Reuters

Comex gold and Nymex crude oil firm up on the weak dollar continuing the Carry Trade.

Gold trades among a wall of pivots at $1115 annual, 1140 semiannual, $1147 for this week. My monthly

resistance has not yet been tested at $1167.



3/4

Crude oil is overbought after reaching $83.95 on Monday with todays resistance at $84.79. If oil runsout of gas the risk is to weekly and annual supports at $77.99 and $77.05. Gasoline is higher than itwas throughout 2009, which is a direct tax on consumers.


The dollar index trades between its 50-day simple moving average at $76.41 and its 200-day at $79.02,which is well below my quarterly resistance at 80.23, which keeps the Dollar Carry Trade alive.



4/4

The Dow continues to move higher in a continuation of 2009. The bull won round six of the TitleFight after reaching a new high for the move at 10,676. My annual support is 10,379 with a weekly pivotat 10,619 and monthly and annual resistances at 10,997 and 11,235.


The Emerging Markets Fund (EEM) reached a new high for the move at $43.47 on overboughtMOJO. My weekly support is $41.94 with annual resistance at $44.99.

The China 25 Fund (FXI) is not yet overbought after testing my annual risky level at $44.53 last week.My weekly support is $41.46.

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.

Check out the latest Forex TVs Markets Review Live each day at 1:30 PM.

http://www.forextv.com/Forex/custom/LiveVideo/Player.jsp

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 to www.ValuEngine.com and review some of the sampleissues of my research.

I Hold No Positions in the Stocks I Cover.

raised earnings bar gives the bear the edge in round seven

Documents