No Dow Theory Buy Signal, but my Risky Level was Tested

8/8/2019 No Dow Theory Buy Signal, but my Risky Level was Tested.

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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 at http://www.valuengine.com/nl/mainnl

November 2, 2010 No Dow Theor y Buy Signal , but my Risk y Level w as Test ed.

For the 10-Year yield my annual value level is 2.813 with my weekly risky levels at 2.498, and

this range factors in QE2. Gold is below my monthly pivot at $1373.0. Crude oil nearly testedmy semiannual pivot at $83.94. The euro failed above 1.40 once again. The Dow Industrialstraded above its April 26th closing high at 11,205.03 for the second Monday in a row, as myannual risky level at 11,235 was tested for a second time in two consecutive Mondays. The DowTransports traded above its May 3rd closing high at 4806.1 testing this weeks risky level at4823. For the Dow Industrial Average my monthly value level is 10,848 with my annual,semiannual and weekly risky levels at 11,235, 11,296 and 11,374. A Dow Theory Buy Signalrequires closes above the April 26th closing high of 11,205.03 on Industrials, with the DowTransports closing above its May 3rd closing high at 4806.1. Wilmington Trust and the mortgagemarket!

10-Year Note (2.627) Daily, annual and annual value levels are 2.752, 2.813 and 2.999 with weeklymonthly, quarterly and semiannual risky levels at 2.498, 2.380, 2.265 and 2.249.

Courtesy of Thomson / Reuters


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Comex Gold ($1351.8) Quarterly, semiannual and annual value levels are $1306.4, $1260.8,$1218.7 and $1115.2 with daily and monthly pivots at $1336.9.3 and $1373.0, and weekly risky level a

$1396.7.


Nymex Crude Oil ($82.93) Monthly and annual value levels are $78.51 and $77.05 with a daily pivo

at $81.63, and semiannual and weekly risky levels at $83.94 and $85.08.



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The Euro (1.3886) Quarterly and monthly value levels are 1.3318 and $1.2709 with a daily pivot at$1.3828, and weekly and semiannual risky levels at 1.4371 and 1.4733.


Daily Dow: (11,125) Monthly, semiannual, annual and quarterly value levels are 10,848, 10,558,10,379 and 8,523 with a daily pivot at 11,162, and annual, semiannual and weekly risky levels at11,235, 11,296 and 11,374. My annual risky level at 11,235 was tested at the November 1st,

October 25th

and April 26th

highs of 11,244.27, 11,247.60 and 11,258.01.



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Wilmington Trust is taken out at a 46% discount. Wilmington Trust (WL) will be purchased by M&TBank (MTB) for $3.84, a 46% discount to Friday closing price. I guess the banking system avoided one

bank failure. According the FDIC data for Wilmington for the second quarter 2010 the bank has $10.7billion in assets with overexposures to C&D and CRE loans, but their ratios of 130% and 328%respectively is better than most banks that have failed. Even the pipeline exposure was 74%. Theregulatory guidelines are 100% of risk-based capital for C&D loans and 300% for CRE loans and themonies lent versus monies committed is 74% when terrible exposures are 80% and higher. With aSELL rating by ValuEngine, Wilmington Trust was on the ValuEngine List of Problem Banks. If yousubscribed to the ValuEngine FDIC report you would have avoided being long this troubledbank.

The below market buyout was caused by miserable third quarter earnings where Wilmington reportedsoaring loan losses and a sixth consecutive quarterly loss. There a many more banks with similar andeven worse financial shape, so betting on a take-over to make money on community banks has gottena bit tougher for names on the ValuEngine List of Problem Banks.

M&T Bank is rated a HOLD according to ValuEngine with a one-year price target at $77.32. If you areusing my Buy and Trade strategy my weekly value level is $71.47 with my monthly risky level at$91.79. As part of the purchase deal, M&T will repay the $330 million in TARP that Wilmington owestaxpayers.

Getting a bid down 46% is better than getting a knock on the door on a late Friday afternoonfrom the FDIC.

The Housing Market Remains an Economic Drag - Most analysts say that the foreclosure messincluding robo-signing will not have a lasting affect on a sluggish housing market. In my opinion theforeclosure mess could be another negative catalyst just as subprime was, particularly in a weakeconomy, low job creation, tight mortgage standards, and the prospect of another leg down for houseprices. Thats a likely outcome when nearly a million homes are expected to be repossessed this yearThe pipeline is said to be 3.1 million borrowers seriously delinquent.

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 products and services visitwww.ValuEngine.com

As Chief Market Strategist at ValuEngine Inc, my research is published regularly on the website www.ValuEngine.com. I have daily, weekly, monthly, andquarterly newsletters available that track a variety of equity and other data parameters as well as my most up-to-date analysis of world markets. Mynewest products include a weekly ETF newsletter as well as the ValuTrader Model Portfolio newsletter. You can go HERE to review sample issues andfind out more about my research.

I Hold No Positions in the Stocks I Cover.

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No Dow Theory Buy Signal, but my Risky Level was Tested