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.

July 13, 2010 – Key Dow Earnings to Guide Dow’s Ups and Downs Next Two or Three Weeks

For US Treasury yields its one auction down, two to go. Gold stability needs a close above my
semiannual pivot at $1218.7. Crude oil remains below my annual pivot at $77.05. The euro is
below monthly resistance at 1.2670. Dow strength targets my annual pivot at 10,379 if earnings
from Intel, JP Morgan, Bank of America and General Electric follows Alcoa’s lead. Earning’s
results masks brewing below the surface at many US companies, particularly those in the IT
business. I handicap Alcoa and Intel.
10-Year Note – Semiannual and quarterly supports are 3.479 and 3.486 with daily and annual pivots at
3.026 and 2.999, and weekly, annual, quarterly and semiannual resistances at 2.858, 2.813, 2.495 and
2.249. The low yield for the move was 2.879 set on July 1st, and was a failed test of my 2.999 and
2.813 annual risky levels. The $35 billion in 3-Year notes had a relatively strong bid at 1.055%. The
bid to cover was 3.20 and the Indirect Bid was a strong 41%. Today the US Treasury sells $21 billion
10-Year notes, and then $13 billion 30-Year bonds on Wednesday.

Courtesy of Thomson / Reuters

Comex Gold – Daily and quarterly supports are $1170.0 and $1140.9 with annual support at $1115.2.
My weekly and semiannual pivots are $1210.3 and $1218.7 with semiannual and monthly resistances
at $1260.8 and $1279.3. The all time high of $1266.5 set on June 21st was a test of June’s
monthly resistance, as a significant top for gold. Gold is below its 50-day and 21-day simple
moving averages at $1217.4 and $1228.0.

Courtesy of Thomson / Reuters

Nymex Crude Oil – Daily and quarterly supports are $71.05 and $56.63 with weekly and annual pivots
at $76.93 and $77.05, and monthly and semiannual resistances at $79.36 and $83.94. The 200-day
simple moving average provides a resistance at $77.27.

Courtesy of Thomson / Reuters

The Euro – Weekly support is 1.2422 with monthly pivot at 1.2670, daily resistance at 1.2939, and the
200-day simple moving average at 1.3720. Monthly and quarterly supports are 1.2035 and 1.1424.

Courtesy of Thomson / Reuters

Daily Dow: Daily and weekly supports are 10,068, 9,635 with the 21-day, 50-day and 200-day simple
moving averages at 10,140, 10,285 and 10,368, and my annual pivot at 10,379. MOJO is rising so the
daily chart is positive with closes above the 21-day. Semiannual and monthly resistances are 10,558
and 10,891 after my annual resistance at 11,235 was tested at the April 26th high at 11,258, which
marked the end of the bear market rally that began in March 2009. We are in the second leg of the
multi-year bear market that began in October 2007 targeting 8,500 before 11,500.

Courtesy of Thomson / Reuters

Handicapping Earnings from the Dow - My overall opinion is that the Dow’s 512 point run-up last
week raises the bar for earnings for the second quarter of 2010. We know that the economy has hit a
soft patch and in a speech on Monday Fed Chairman Ben Bernanke is worried about bank lending to
businesses, especially small businesses. Most companies regardless of size are becoming more
cautious with expansion plans, which will be a drag on economic growth in the quarters ahead. The big
companies are hoarding cash, they are not spending on capital improvements and they are not hiring.
Small businesses who want a loan cannot get loans from more than 50% of the community banks due
to their overexposures to commercial real estate loans.
I exchanged instant messages from a friend who is in the global IT business. He estimates that around
the globe there are 25 million IT projects that are on hold, or companies are having planning meetings
this month to decide to put projects on hold. A slowdown in IT spending will likely hurt earnings from the
likes of Cisco Systems (CSCO) and Microsoft (MSFT). Companies are reluctant to shift from Windows
XP, but ordering a new PC with XP is becoming more difficult as Microsoft holds off support in an
attempt to shift users to Vista or Windows 7. Even upgrades for bandwidth are not coming through from
AT&T (T), Verizon (VZ) or the smaller wireless providers. Even Internet advertising is beginning to slow
down, which could be seen in earnings reports from Google (GOOG) and Yahoo! (YHOO).
Handicapping This Week’s Key Earnings Reports
Alcoa (AA) is rated a HOLD according to ValuEngine with fair value at $17.22, which makes the stock
36.9% undervalued. The daily chart for Alcoa shows rising MOJO with the stock below its 21-day, 50-
day and 200-day simple moving averages at $10.95, $11.47 and $13.35. My weekly value level is
$9.73 with semiannual risky level at $12.20. Alcoa shares rallied in after hours trading and holding
the 21-day at $10.95 targets the 50-day at $11.47..

Courtesy of Thomson / Reuters

Intel Inc (INTC) is rated a BUY according to ValuEngine with fair value at $27.17, which makes the
stock 24.3% undervalued. The daily chart for Intel shows rising MOJO with the stock above its 21-day
simple moving average at $20.44, which targets the 200-day and 50-day simple moving averages at
$20.77 and $21.08. My weekly value level is $19.23 with semiannual risky level at $21.59. Intel is in
the ValuTrader model portfolio with an entry of $19.01 tested on July 1st, which is a great
example of my “Buy and Trade” strategy.

Courtesy of Thomson / Reuters

That’s today’s Four in Four. Have a great day.

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
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.”