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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 ForexTV Main Street vs Wall Street can be watched on the web HERE.

February 8, 2010 – Global Bailouts Admits Fragile Recovery

The G-7 to keep the bailout money flowing. Consumers continue to retrench on spending. The
Dow and S&P 500 confirm weekly key reversals. Bad weather slows Bank Failure Friday.
G-7 to keep the Money Spigot Open
Global economic leaders to keep on spending in hopes of repairing battered economies around world.
The problems in countries such as Greece, Portugal and Spain have been caused by too much
spending resulting in debt levels that cannot be sustained.
I would not spend one thin dime to help another country in financial stress, when most US States are in
worse financial stress. “Help Main Street USA First” is my theme.
In American we are piling up debt and have raised the Debt Ceiling to $14.2 trillion to which we must
eventually add the $6.3 trillion of Fannie and Freddie debt and mortgages under Conservatorship.
Instead of doing so, President Obama’s Budget keeps these Fannie and Freddie obligations of US
Citizens on Main Street under the rug of the US Budget.
The problem is the fact that trillions have been lent to keep Wall Street and global investors in toxic
securities afloat, while Main Street sinks further into the abyss of consumer and real estate debt without
similar relief.
As an engineer I learned that solving a problem requires solutions to fix the foundation or the cause of
an event. This is not what is happening in our housing meltdown, and our banking system continues to
falter as bad loans rise.
The “Volcker Rule” is a step in the right direction as are other measures to remove the mantra of “too
big to fail”, but despite the president’s line in the sand, these effective measures appear Dead on
Arrival.
Consumer Credit Continues to Decline
Consumers reduced debt for the 11th consecutive month in December paying down credit card debt,
but there was some increased borrowing for cars and other products. This improvement may have
helped the stock market rebound in the final hour on Friday, but did not do so by enough to abort the
confirmation of the weekly key reversals for the Dow and S&P 500.
Consumer spending is 70% of US economic spending and credit card debt declined $8.5 billion, while
other types of loans increased by $6.8 billion. Keep in mind that November’s consumer spending was
revised to a $21.8 billion drop the largest decline since records began in 1943. Even with the record
monthly length of declines consumer borrowing is still $2.46 trillion.
Consumer spending actually increased $40 billion in 2008, which was the first year of Recession, then
declined by $142 billion in 2009 as the economy supposedly, was exiting Recession.
The Dow & S&P 500 Confirm Weekly Key Reversals
The lower closes over the past two weeks confirm the key reversal for the Dow and S&P 500, which
occurred three weeks ago. From the January 19th high of 10,729.89 to the February 5th low of 9,835.09
the Dow lost 8.3%.
I have been in a sell strength mode since the beginning of 2010 and thus helped traders and investors
in agreement to capture a portion of an 895 point decline for the Dow. This is wealth “created or saved”
for traders and investors willing to short stocks or who had 50% to 75% in cash, as I suggested.
The daily and weekly charts for the Dow are negative with the daily chart oversold again. I believe that
last Friday’s low should hold this week and that daily and weekly pivots at 10,073 and 10,144 will be
tested. This is the weekly graph:

Chart Courtesy of Thomson / Reuters

Be aware that my annual pivot should be the ceiling at 10,379 and that there is risk to quarterly support
at 6,705. The next warning would be a close in February below 10,067, or even worse a close below
the five-month modified moving average at 9,710.
With the FDIC facing two feet of snow in Washington DC only one small private community bank
was closed on Bank Failure Friday. The 16th bank failure of 2010 was overexposed to C&D and CRE
loans.
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.

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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.”