8/14/2019 Return of Multi-Year Bear Confirmation could be October 16

1/6

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, stockpicks, and commentary can be found HERE.

Suttmeier's Four in Four video can be watched on the web HERE.

October 5, 2009 Return of Multi-Year Bear Confirmation could be October 16

Bank Failure Friday, Yields, Comex Gold and Nymex Crude Oil, Housing and Financials,and the charts for the S&P 500

Three more banks were closed by the FDIC last Friday

The fourth quarter begins with three small private community banks being closed by the FDICon Bank Failure Friday. All three suffered from the same problem, an overexposure to C&Dand CRE loans.

Notice that in various testimonies in Congress how our elected officials defend their localbanks, yet most of the 98 failures year to date have been local banks. Total failures are up to123 on the way to 500 to 800 by the 2011 / 2012 window.

The Achilles Heel has been banks in violation of the regulatory guidelines put into place bythe US Treasury, Federal Reserve and FDIC in December 2006. These guidelines establishedthe maximum percent of risk-based capital that banks should loan to real estate developers.

Why is it that our banking regulators and Congress continue to ignore these guidelines? TheTARP continues to invest in small community banks, which are not suitable investments fortax payers.

I now project that the Deposit Insurance Fund is in arrears by $4.9 billion, which the FDIC iscovering with its $22 billion Slush Fund.

Charts Courtesy of Thomson / Reuters

The yield on the 10-Year note

Monthly support is 3.677 with daily and weekly at 3.159 and 2.95 after Fridays low yield wasa failed test of the 200-day simple moving average at 3.125, last tested on May 21st.

This week the US Treasury auctions $39 billion 3-Year notes on Tuesday, $20 billion 10-Yearnotes on Wednesday, and $12 billion 30-Year bonds on Thursday.

8/14/2019 Return of Multi-Year Bear Confirmation could be October 16

2/6

Weakening Comex Copper and Nymex Crude Oil questions global growth story

To prove the global growth story, copper needs to breakout above the 200-week simplemoving average at 291.96. The risk is to my annual pivot at 240.20.

8/14/2019 Return of Multi-Year Bear Confirmation could be October 16

3/6

For crude oil my annual pivots are $68.81 and $66.51 with monthly and quarterly resistancesat $82.98 and $83.16. A weekly close above the 200-week simple moving average at $75.02remains upside key.

Housing and Financials

The Housing Sector Index (HGX) ended Friday below the 50-day simple moving average at104, which indicates risk to the 200-day at 86.12. The weekly chart shifted to negative at

Fridays close. Housing is thus providing downside leadership as it did for the first wave of themulti-year bear market.

8/14/2019 Return of Multi-Year Bear Confirmation could be October 16

4/6

The Americas Community Bankers Index (ABAQ) closed Friday below its 21-day, 50-day and200-day simple moving averages at 149, 149.50 and 146.91.

Keep in mind that 37.5% of all FDIC insured financial institutions (over 3,000) areoverexposed to C&D and CRE loans, which makes it tough for them to pony up three yearsworth of fees to prop up the FDIC Deposit Insurance Fund.

The Regional Banking Index (BKX) ended Friday below its 21-day and 50-day simple movingaverages at 46.47 and 44.95, which indicates risk to the 200-day at 36.21.

8/14/2019 Return of Multi-Year Bear Confirmation could be October 16

5/6

The daily and weekly charts for the S&P 500

The key support for SPX on the daily chart is the 50-day simple moving average at 1022,

which held on Friday. A weekly close below the five-week modified moving average also at1022 wont pull MOJO below the overbought reading of 8.0 and higher, but that could happenon the Ides of October.

8/14/2019 Return of Multi-Year Bear Confirmation could be October 16

6/6

Send me your comments and questions to Rsuttmeier@Gmail.com. For more information onour products and services visit www.ValuEngine.com

Thats todays Four in Four. Have a great day.

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

As Chief Market Strategist at ValuEngine Inc, my research is published regularly on the websitewww.ValuEngine.com. I have daily, weekly, monthly, and quarterly newsletters available that track a variety ofequity and other data parameters as well as my most up-to-date analysis of world markets. My newest productsinclude a weekly ETF newsletter as well as the ValuTrader Model Portfolio newsletter. I hope that you will go to

www.ValuEngine.com and review some of the sample issues of my research.

I Hold No Positions in the Stocks I Cover.