Richard Suttmeier is the Chief Market Strategist at www.ValuEngine.com. ValuEngine is a fundamentally-based quant research firm in Newtown, PA.

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http://www.valuengine.com/pub/Unsubscribe? April 30, 2012 The Dow, S&P 500 and NASDAQ are set to Challenge March Highs. Markets in Review: Asian stocks were lower on Friday. The Nikkei 225 ended their session at 9,521 down 0.43% on
the day. The Hang Seng ended their session at 20,741 down 0.33% on the day. European exchanges closed higher. The FTSE 100 ended their session at 5,777 up 0.49% on the day. The DAX ended their session at 6,801 up 0.91% on the day. The CAC 40 ended their session at 3,266 up 1.14% on the day. The yield on the 10-Year US Treasury tested my semiannual pivot at 1.903. The Advanced reading of Real GDP for the first quarter of 2012 came in below expectations at just 2.2%. A drag was Business Investment which was down 2.1%, the first decline since Q4 2009. Gold traded as high as $1668.4 the Troy ounce still below the death cross defined by the 50-day simple moving average at $1679.3 being below the 200-day simple moving average at $1697.4. Crude oil rebounded to $105.00 per barrel to $105.00 staying below its 50day simple moving average at $105.12. The euro versus the dollar traded up to 1.3269 above its 50-day simple moving average at 1.3210. The Dow Industrial Average rallied to a high at 13,266.68 versus the March 16th high at 13,289.08. The S&P 500 traded as high as 1406.6 testing last weeks risky level with its March 27th high at 1419.15. The NASDAQs rallied to a high at 3076.44 versus the March 27th high at 3134.17.

Todays Four in Four Key Levels: 1. Yields The yield on the 10-Year US Treasury tested my semiannual pivot at 1.903. The 50-day / 200-day at 2.081 / 2.087 could confirm a Death Cross this week, which is a warning for higher yields ahead. This weeks value level is 2.186. 2. Commodities If gold stays above my semiannual pivots at $1635.8 and $1659.4 the Death Cross with the 50-day below the 200-day at $1679.3 and $1697.4 could be challenged, but lagging gold stocks should be considered a warning. Crude oil is trading around my semiannual pivot at $104.84 with the 50-day SMA at $105.12. 3. Currencies The euro versus the dollar remains above my semiannual value level at 1.2980 with my weekly pivot at 1.3180 and quarterly risky level at 1.3366. 4. Equities My overall neutral zone is between my annual pivot at 1363.2 on the S&P 500 and 836.15 on the Russell 2000. Quarterly value levels are 1337.7 SPX and 2911 NASDAQ with quarterly pivots at 12,794 Dow Industrials and 829.34 Russell 2000, and quarterly risky level at 5420 on Dow Transports. This weeks pivots / risky levels are 13,210 Dow Industrials, 1415.8 SPX, 3120 NASDAQ, 5336 Dow Transports, and 836.88 Russell 2000. My prediction remains that Dow Transports and Russell 2000 will continue to lag 2011 all time highs at 5627.85 set on July 7th and 868.57 set on May 2nd.
5. ValuEngine Valuations Stocks remains reasonably priced fundamentally with 57.4% of all stocks undervalued with six undervalued sectors and ten overvalued sectors. Aerospace is 10.1% UV, Computers & Technology 12.7% OV, Finance 11.6% OV, Medical 13.9% OV, and Retail-Wholesale 14.7% OV.

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