qe2 hurts main street at the gas pump

8/8/2019 QE2 Hurts Main Street at the Gas Pump

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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 8, 2010 QE2 Hurt s Main Str eet at the Gas Pump

Despite QE2 the yield on the 10-Year note appears to be forming an inverse head and

shoulders pattern, as yields rise when inflation expectations become a problem. Treasurysupply will be a test this week. QE2 has gold at an all time high last week at $1398.7 just abovelast weeks risky level. Crude oil traded above its May 3rd high at $87.15 thanks to QE2 with theprice at the gasoline pump up about a dime since Wednesdays QE2 announcement. The eurotraded to a new high for the move at 1.4281 last Thursday. The Dow Theory Buy Signal has theDow above my semiannual pivot at 11,296 with this weeks risky level at 11,650. Bank FailureFriday brings the total failures for 2010 up to 143 above last years 140 failures. Check outValuEngines new sixteen sectors.

10-Year Note (2.538) Annual and annual value levels are 2.813 and 2.999 with a daily pivot at2.565, and monthly, weekly, quarterly and semiannual risky levels at 2.380, 2.332, 2.265 and 2.249.

Courtesy of Thomson / Reuters


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Comex Gold ($1394.9) Quarterly, semiannual and annual value levels are $1306.4, $1260.8,$1218.7 and $1115.2 with monthly and daily pivots at $1373.0 and $1385.9, and weekly risky level at

$1438.1. The weekly chart shows gold overbought.


Nymex Crude Oil ($87.08) Quarterly, monthly and annual value levels are $83.94, $78.51 and$77.05 with daily and weekly pivots at $85.87 and $86.51, and semiannual and annual risky levels at

$96.53 and $97.29.


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The Euro (1.4035) Quarterly and monthly value levels are 1.3318 and $1.2709 with a daily pivot at1.4135, and weekly and semiannual risky levels at 1.4879 and 1.4733. The weekly chart shows theeuro overbought.


Weekly Dow:(11,444) Weekly MOJO has become extremely overbought and this weeks risky level is11,650. The five-week modified moving average is 10,987 with the 200-week simple moving average

at 10,963. My semiannual and annual pivots are 11,296 and 11,235 with monthly, semiannual andannual value levels at 10,848, 10,558 and 10,379.



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Bank Failure Friday The FDIC closed four more community banks last Friday. The total number offailures for 2010 is now 143 on the way to my predicted range of 150 to 200 for 2010. There are now

16 failures so far in the fourth quarter.

The FDIC Deposit Insurance fund has now been drained by $1.4 billion in the fourth quarter to date,which brings the DIF Deficit to an estimated $19.0 billion. The FDIC has already burned through theassessments for 2010. The assessments for 2011 and 2012 have been pre-paid at $15.33 billion peryear.

During The Great Credit Crunch the FDIC only closed 25 banks during all of 2008. In 2009 the FDICpicked up the pace with 140 bank failures with a peak of 50 in the third quarter of 2009. So far in 2010the FDIC closed 41 banks in the first quarter, another 45 in the second quarter, 41 for the third quarterand 16 for the fourth quarter for a total of 143 year to date. The total for The Great Credit Crunch isup to 308 continuing its path to my predicted 500 to 800 by the end of 2012 into 2013.

The four failed banks last Friday had extreme overexposures to C&D and CRE loans. C&D exposuresfor the four overexposed were between 164% and 843% versus the 100% regulatory guideline. TheCRE exposures were between 700% and 1673% versus the 300% of risk-based capital regulatoryguideline. The CRE loan pipelines were between 83% and 98% funded versus a healthy pipeline of60%. Almost all publicly traded bank failures have been on the ValuEngine List of ProblemBanks.

ValuEngine goes to Sixteen Sectors from Eleven - Check out www.ValuEngine.com for new Sectorand Industry designations. In an effort to bring our Sector and Industry designations in line withstandard financial industry assignments, we have partnered with Zacks Investment Research, a worldleader in fundamental financial data. Effective immediately, our stocks are classified as part of 16overall sectors containing 289 individual industry groups.

We have implemented our new data feed over the weekend, so you will notice a change in the numbeof stocks in a given sector or industry group as well as some fluctuations in certain data points--suchas sector and industry valuations, performance, comparables, and ratings data. This change shouldmake our valuation, forecast, and ratings services more useful as the sector and industry groupingswill be more akin to similar designations found on Bloomberg and other financial data serviceproviders.


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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.

qe2 hurts main street at the gas pump

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