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 can be watched on the web HERE.

November 12, 2009 – This is not a New Bull Market for Stocks

This is not a new Bull Market. The key to ending the dollar carry trade is the Dollar
Index. At the dollar lows the Dow and S&P 500 reached new highs for the move. More
Bank Failures Loom!
We are still in a Multi-Year Bear Market that began in October 2007, led lower by
financials.
The Bear Market Rally is based mainly on the Dollar Carry trade not on economic
fundamentals. You can not have a New Bull Market when ValuEngine shows seven of eleven
sectors overvalued.
Year to date the S&P 500 is up by 21.6% with community banks down 24.9% and regional
banks flat. Where's the leadership?
The Dollar Index traded to a new low for the move on Wednesday at 74.86. With Tuesday’s
high at 75.38, Wednesday was a potential key reversal day with a close above that level. This
did not happen. Charts courtesy of Thomson / Reuters
The weekly chart shows the up trend that connects the lows of April 2008 and July 2008 at
74.48 this week. Resistance is the five-week modified moving average at 76.35.
The Dow traded as high as 10,342 on Wednesday approaching Ascending Wedge resistance
at 10,380 with the down trend that goes back to October 2007 at 10,692. A decisive move
above 10,692 ends the multi-year bear market, but does not signal a new bull market, but
instead a trading range with my semiannual resistance at 11,500 the upper end.

The S&P 500 traded as high as 1105 with down trend resistance going back to October 2007
at 1123.
The other major averages stayed below prior highs: The prior high for the NASDAQ is
2190 with the 200-week simple moving average at 2212.
Transports, the Russell 2000 and SOX still show double-tops at 4050 / 4070 on Transports,
625 on the small cap index and 337 on the SOX. The high on Transports is between annual
resistances at 4037 and 4199. The high on the SOX is a failed test of my semiannual
resistance at 337.39.
Be prepared for more bank failures - We are up to 120 bank failures year to date and 149
since the end of 2007, when “The Great Credit Crunch” began. FDIC Chair Sheila Bair predicts
that many more bank failures lie ahead. My prediction has been that 500 to 800 banks will fail
by the end of 2012.
This is not good news for struggling small businesses, as when a bank fails all business clients
must find a new business relationship with the bank taking over the failed banks assets, or at a
different bank. This is tough as banks continue to tighten lending standards.
Last Friday’s Bank Failure Friday Stretched to China - Four out of five of the bank failures
on Friday bring were private banks and four out of five were extremely overexposed to C&D
and CRE loans.
United Commercial Bank publicly traded as UCBH Holdings Inc (UCBH) had 63 U.S.
branches, a branch in Hong Kong and a subsidiary, UCB-China, in Shanghai. They reopened
as part of East West Bank (EWBC), which has a similar business model including China.
UCBH Holdings is the first failed TARP recipient. UCBH received $298.7 million in TARP
money, paid a $7.5 million dividend in May, but did not make the payment due in August. UCBH
had C&D and CRE loan ratios of 211% and 678% versus risk based capital, well above the
ignored regulatory guidelines.
The closure of UCBH satisfied one of my long-held predictions – some banks who got
TARP money would fail. UCBH was a member of the ValuEngine List of Problem banks.
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.

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.”