April 29, 2011

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VALUATION WATCH: Our models find that overvaluation is

approaching critical levels. Overvalued stocks now make up
almost 62% of our universe and 30% of the universe is
calculated to be overvalued by 20% or more. All Sectors are
calculated to be overvalued.

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This week's free download is our report on Schlumberger (SLB). Schlumberger
Limited is a global technology services company consisting of two business segments,
Schlumberger Oilfield Services and SchlumbergerSema. Schlumberger Oilfield
Services is the leading provider of exploration and production services, solutions and
technology to the international petroleum industry. SchlumbergerSema is a leading
information technology services company providing a unique combination of
domain expertise and global capabilities delivered on a local basis.

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MARKET OVERVIEW

Index started week Thursday Close 4 day change 4 day change % ytd
DJIA 12505.99 12763.3 257.31 2.06% 10.24%
NASDAQ 2820.28 2872.53 52.25 1.85% 7.32%
RUSSELL 2000 844.5 861.55 17.05 2.02% 8.57%
S&P 500 1337.14 1360.48 23.34 1.75% 8.18%

Summary of VE Stock Universe

Stocks Undervalued 38.32%
Stocks Overvalued 61.68%
Stocks Undervalued by 20% 16.62%
Stocks Overvalued by 20% 30.27%

SECTOR OVERVIEW
Sector Change MTD YTD Valuation Last 12- P/E
MReturn Ratio
Aerospace 0.24% -1.66% 13.28% 8.41% overvalued 17.65% 19.32
Auto-Tires-Trucks -0.02% 1.54% -0.71% 9.21% overvalued 32.02% 20.77
Basic Materials -0.39% 0.02% 1.17% 9.69% overvalued 45.33% 26
Business Services 0.00% 1.48% 7.44% 9.68% overvalued 10.08% 51.26
Computer and Technology -0.17% 2.26% 14.63% 9.40% overvalued 26.41% 46.15
Construction -0.42% -1.33% 1.70% 4.96% overvalued -0.77% 34.37
Consumer Discretionary 0.14% 2.96% 8.81% 6.92% overvalued 9.86% 33.76
Consumer Staples -0.43% -0.40% -0.68% 9.92% overvalued 13.94% 19.41
Finance 0.51% 0.74% 4.24% 7.88% overvalued 4.67% 26.23
Industrial Products 0.22% 0.83% 8.63% 10.27% overvalued 21.80% 30.72
Medical 0.66% 3.74% 16.41% 5.58% overvalued 13.66% 39.45
Multi-Sector Conglomerates 0.32% 1.03% 6.03% 16.59% overvalued 24.81% 31.11
Oils-Energy -0.39% -2.79% 10.26% 19.92% overvalued 35.54% 48.35
Retail-Wholesale 0.31% 2.66% 7.96% 7.95% overvalued 14.90% 29.67
Transportation 0.63% 0.35% 1.69% 13.56% overvalued 13.95% 22.3
Utilities 0.42% 1.98% 7.01% 12.63% overvalued 19.38% 21.76
Sector Talk—Gold and Silver Mining
Below, we present the latest data on the Gold and Silver Mining Industries from
our Institutional software package (VEI). These results were filtered by market price
and volume--no results below 3$/share or less than 100k shares/day volume.

Top-Five Gold and Silver Mining Stocks--Short-Term Forecast Returns

Ticker Name Mkt Price Valuation(%) Last 12-M
Retn(%)
TRE TANZANIAN ROYAL 6.74 N/A 45.89
BVN BUENAVENTUR-ADR 39.92 -23.24 23.17
ABX BARRICK GOLD CP 50.72 -2.33 21.72
AG FIRST MAJESTIC 21.28 N/A 491.11
SLW SILVER WHEATON 41.07 -10.14 119.63

Top-Five Gold and Silver Mining Stocks--Long-Term Forecast Returns

Ticker Name Mkt Price Valuation(%) Last 12-M
Retn(%)
SLW SILVER WHEATON 41.07 -10.14 119.63
IAG IAMGOLD CORP 20.48 -2.26 18.79
ABX BARRICK GOLD CP 50.72 -2.33 21.72
ANV ALLIED NEV GOLD 41.7 89.16 147.04
BVN BUENAVENTUR-ADR 39.92 -23.24 23.17

Top-Five Gold and Silver Mining Sector Stocks--Composite Score

Ticker Name Mkt Price Valuation(%) Last 12-M
Retn(%)
BVN BUENAVENTUR-ADR 39.92 -23.24 23.17
SLW SILVER WHEATON 41.07 -10.14 119.63
ABX BARRICK GOLD CP 50.72 -2.33 21.72
IAG IAMGOLD CORP 20.48 -2.26 18.79
NEM NEWMONT MINING 58.79 4.88 8.37
Top-Five Gold and Silver Mining Sector Stocks--Most Overvalued
Ticker Name Mkt Price Valuation(%) Last 12-M
Retn(%)
ANV ALLIED NEV GOLD 41.7 89.16 147.04
MVG MAG SILVER CORP 12.76 65.3 66.8
EXK ENDEAVOUR SILVR 11.71 58.32 213.94
NAK NORTHERN DYNSTY 13.61 54.47 38.31
IVN IVANHOE MINES 26.12 51.98 58.88

Subscribers can check out the latest valuation, forecast, and ratings figures on
the Gold and Silver Miners from our Models HERE.
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Valuation and Forecast Models continue to provide investors with accurate,
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provided clients with many winners in both up and down periods

What's Hot—ValuEngine.com Universe Overvaluation

Figures Reaching Critical Levels

The ValuEngine Valuation Model tracks more than 5500 US equities, ADRs, and
foreign stock which trade on US exchanges. The model calculates a level of
mispricing or valuation percentage for each equity based on what the stock should
be worth if the market were totally rational and efficient--an academic exercise to be
sure, but one which allows for useful comparisons between equities, sectors, and
industries.
We track valuation figures and use them as a metric for making calls about the
overall state of the market. As of last night's close, our overall universe overvaluation
and overvalued by 20% or more figures have reaches levels which have been
correlated with market dips in the past.
 Whenever we see levels in overvaluation levels in excess of @ 60% for the
overall universe and 27.5% for the overvalued by 20% or more categories, we issue a
valuation watch. ValuEngine has issued a market valuation watch as of today, April
28th. This is a time for investors to keep a close eye and the market and to consider
booking some profits and perhaps hedging against a move to the downside.
Our last Valuation Watch took place from March 30th to April 13th. We began
that Valuation Watch with the SP 500 at 1319 and saw it rise to 1335 before dropping
to 1314. At that time we saw our overall valuation figures approach the Valuation
Warning level of 65%-- but they peaked at 64.27%. Since that mid-April dip, the
market has resumed its upward climb.
Below, we present the chart of our most recent Valuation Watches and
Warnings. The yellow line tracks the overall universe overvaluation figure when it is
above 60% and a Valuation Watch is on. The red bars show days where we issued a
Valuation Warning. The blue line is the SP 500 close.

We issue our latest Valuation Watch with the SP 500 at the 1355 level and the
overall universe valuation figure at 61.75%. The Valuation model constantly adjusts
itself to new earnings reports so valuation can come into line with new information--
thus a warning could occur at 1340 but not 1355 since the model has digested the
new earnings figures and may not find the individual equities as overvalued as they
once were in light of new fundamental data.
 Of course, as always past performance is no indication of future
behavior. Given the wild gyrations of the markets over the past few years, it has been
tough to rely completely on any fundamentally or technically-based mode of
analysis. As always, shorting in a bubble can kill and must be utilized prudently.
In addition to the overall valuation metrics, we see that on a sector basis ALL
sectors are calculated to be overvalued. In the past, our Chief Market Strategist
Richard Suttmeier has used the sector valuation figures to buttress his macro market
calls. Almost half of the sectors are calculated to be overvalued by almost 10% or
more. This is another indicator that stocks are no longer a bargain and that investors
should consider implementing additional risk management tools and/or booking
some profits.

Suttmeier Says
--Commentary and Analysis from Chief Market Strategist
Richard Suttmeier
If you have any comments or questions, send them to
Rsuttmeier@Gmail.com

Treasury Yields
10-Year-- (3.311) My weekly value level is 3.430 with daily and
monthly risky levels at 3.299 and 3.181.

Commodities and Forex

Comex Gold-- ($1536.3) Fed-supported commodity speculation continues with

another all time high at $1538.8. My semiannual value level is $1452.6 with weekly,
quarterly and daily pivots at $1501.2, $1523.7 and $1536.7, and monthly risky level at
$1559.9.

Nymex Crude-- ($112.85) Fed-indorsed speculation resulted in another multi-year high

at $113.97. My Semiannual value level is $107.14 with a daily pivot at $113.25, and
quarterly and weekly risky levels at $114.27, $116.86 and $120.52.

The Euro-- (1.4818) The Federal Reserve policy ignores the dollar. Quarterly and
monthly value levels are 1.4308 and 1.4170 with daily and quarterly pivots at 1.4746
and 1.4624, and weekly pivot at 1.4771. My annual risky level is 1.6367.
Major Indices

The Dow Industrial Average has been the leader and its daily, weekly and
monthly charts are overbought. This is not a sell signal but reflects the facts that stocks
have moved beyond what’s justified by a slower than expected economic growth
and weak labor market. Fed policy is helping Wall Street reap trading profits from
commodity and stock market speculation, while Main Street has been left struggling
with a higher cost of living that’s being ignored by Fed policy.

Key Levels for the Major Equity Averages

Dow -- (12,763) My monthly and weekly value levels are 12,481 and 12,404 with
a daily pivot at 12,707, and Thursday’s new 2011 high at 12,776.14. My quarterly
and annual risky levels are 13,774
and 13,890.

S&P 500 – (1360.5) My weekly value level is 1318.7 with a daily pivot at 1356.9,
Thursday’s new 2011 high at 1361.71 and this month’s pivot at 1360.0. My
quarterly risky level is 1500.4.

NASDAQ – (2873) My weekly value level is 2744 with a daily pivot at 2878,
Thursday’s new 2011 high at 2874.59, and my monthly risky level at 2898.

NASDAQ 100 – (2410) My weekly value level is 2288 with a daily risky level at
2436, and monthly risky level at 2477.

Dow Transports – (55510) My annual value level is 5179 with daily, weekly and
monthly pivots at 5419, 5365 and 5371, and Thursday’s new 2011 high at
5526.27. Transports are approaching its all time high at 5536.57 set in May 2008
despite near record fuel costs.

Russell 2000 – (861.54) My weekly value level is 835.89 with daily and monthly
pivots at 855.74 and 856.67. Thursday’s new 2011 high at 861.55 is also a new all
time high.

The SOX – (447.54) My weekly value level is 408.52 with daily and monthly risky
levels at 452.09 and 452.34 and the February 18th high at 474.33.
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