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 web
HERE.

December 4, 2009 – Today should be a Break-out or a Key Reversal

Breakout or Key Reversal – That is the Question for the Dow Industrial Average. The S&P 500
may confirm a daily key reversal. Tracking the rising Unemployment Rate! Crude oil reflects the
true status of the Recession. More on housing and financials!
The Dow remains positive but overbought on its weekly chart with resistance at 10,581, which is on the
down trend that goes back to the October 2007 high. This week the Dow reached a new high for the
move at 10,513.52 and last week’s low is 10,231.25. Charts courtesy of Thomson / Reuters.

Today’s the day when the Dow needs to breakout above 10,600 to signal an end to the multi-year bear
market. If that does not occur and the close is below 10,231.25 we have a weekly key reversal. A top
would be confirmed by two consecutive lower weekly closes. This would also keep the multi-year bear
market in place going into 2010.
The S&P 500 had a daily key reversal on Thursday. Following a new high for the move at 1117.28,
the close was below Wednesday’s low at 1105.29. Supports are the 21-day and 50-day simple moving
averages at 1094.81 and 1076.88. A close above 1111 or Snake Eyes is the breakout for the S&P 500.

The Unemployment Rate should stay at 10% or higher

This chart shows the unemployment rate at 4.6% when the NBER declared the US economy in
Recession. GDP ended 2007 at $14.18 trillion and did not peak until the third quarter of 2008 at $14.55
trillion.

Unemployment was at 8.2% at the end of August 2009, when many forecasters declared the Recession
over. GDP ended the second quarter at $14.15 trillion and bumped up to $14.27 trillion in the
preliminary reading for the third quarter. How can you declare the Recession over with the
unemployment rate up another 2% to 10.2% in just two additional months?
The Weekly Chart for Nymex Crude Oil is the real economic tell as we have seen lower weekly
highs for the past seven weeks with the 200-week simple moving average as support at $75.64. A close
today below $75.64 is the biggest indicator that the economy remains in Recession.
Homebuyers face tighter mortgage standards thanks to the FHA
The FHA, along with Fannie Mae and Freddie Mac, accounted for more than 90% of all U.S. home
loans in the first half of 2009. All three are in difficult financial straights and will tighten lending
standards, which could put the brakes on the anemically improving housing market.
We have stimulus dollars, housing bailout money and cheap funds from the Federal Reserve, but all it
has done is weaken the dollar and create the paying field for commodity and equity speculation.
Money is not flowing into community and regional banks and as a result credit conditions for consumers
and small businesses have tightened as bad loans rise.
We do we need tougher financial regulations?
We need a Treasury Secretary, a Fed Chairman and FDIC Chief who follow their own regulatory
guidelines instead of ignoring them. Poor policy decisions and lack of regulation resulted bubbles in
housing, commodities and equity prices. This caused “The Great Credit Crunch” which continues today.
Now these same regulators are causing a renewed commodity and equity bubbles, while not solving
the problem that caused our economic problem. Community banks are falling like dominos, small
businesses are not getting credit while Wall Street reaps speculative trading gains, and despite
program after program to help homeowners, defaults and foreclosures continue to accelerate. We don’t
need new regulations. We need new leaders of the regulatory bodies already in place.
Send me your comments and questions to Rsuttmeier@Gmail.com. For more information on our
products and services visit www.ValuEngine.com
That’s today’s Four in Four. Have a great day.

Check out the latest Forex TV’s Markets Review.

http://www.forextv.com/Forex/Video/Video.jsp?channel=41,276,1241,249,1314,1418,1423,1424,1445&movieid=57867

Richard Suttmeier
Chief Market Strategist
www.ValuEngine.com
(800) 381-5576
As Chief Market Strategist at ValuEngine Inc, my research is published regularly on the website www.ValuEngine.com. I
have daily, weekly, monthly, and quarterly newsletters available that track a variety of equity and other data parameters as
well 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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issues of my research.

“I Hold No Positions in the Stocks I Cover.”