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.

June 30, 2010 – The Dow breaks below 10,000, second half target 8,500 The yield on the 10-Year Treasury is below 3%. Gold continues to consolidate off the June 21st high at $1266.5. Crude is below my annual pivot at $77.05. The euro is below my quarterly resistance at 1.2450, which was tested on June 21st. When the Dow was at 11,258 on April 26th I re-iterated my “Dow 8,500 before 11,500” market call. Consumer confidence plunges, home prices are stable but ripe for a 50% drop, and housing & financials take the lead lower. US Treasury Yields – The 10-Year yield traded as low as 2.924 into Wednesday morning as the daily chart shows MOJO that indicates that the decline in yields is overdone. This yield has tested my zone of annual levels at 2.999 to 2.813. Investors should consider some profit-taking at these levels. Tomorrow I will show new monthly, quarterly and semiannual levels for the 10-Year yield.

Chart Courtesy of Thomson / Reuters

Comex Gold – The daily chart shows MOJO drifting lower following the test of $1266.5 on June 21st, which was a test of June’s resistance at $1265.9 where investors booked some profits. A daily close below the 21-day simple moving average at $1236.2 indicates risk to the 50-day at $1211.1.

Courtesy of Thomson / Reuters

Nymex Crude Oil – The daily chart shows declining MOJO with the 21-day simple moving average as support at $75.62 with my annual pivot and 200-day at $77.05 and $77.21.

Courtesy of Thomson / Reuters

The Euro – The daily chart shows declining MOJO after strength reached my quarterly resistance at 1.2450 on June 21st. The euro is flip-flopping around its 21-day simple moving average at 1.2211.

Courtesy of Thomson / Reuters

Daily Dow: Weekly support is 9,483 with today’s pivot at 9,935. The Dow is below the 21-day, 50-day and 200-day simple moving averages at 10,177, 10,475 and 10,360, and my annual pivot at 10,379. MOJO is declining on the daily chart. My call remains that the April 26th high at 11,258 ended the bear market rally since March 2009, and starts the second leg of the multi-year bear market. It’s still “Dow 8,500 before Dow 11,500”.

Courtesy of Thomson / Reuters

Dow back below 10K as Consumer Confidence Plunges - The Conference Boards reading for Consumer Confidence plunged to 52.9 in June from 62.7 in May, as consumers worry about job security and losing their homes. Keep in mind that the neutral zone for this Consumer Confidence measure is 90 to 120, readings in the 50’s and 60’s reflect a dire situation as measured by the thoughts of consumers on Main Street, USA. The S&P Case Shiller Home Price Index for April showed a 3.8% year over year gain for the 20-City Index, not surprising give that was the last month of the home buyer tax credits for contracts signed. S&P described the report as not yet showing any signs of a sustained recovery. Keep in mind that home prices remain close to the levels of the April 2009 lows, and that the index is still 50% above where it was in 1999 / 2000. With stocks below 1999 / 2000 levels the risk for home prices is to do the same given the potential wave of foreclosures and short sales in the second half of the year.

Just before Memorial Day I wrote about a “June Swoon in Housing & Banking” in a Forbes.com article. The PHLX Housing Sector Index (HGX) declined 16.6% in June with one day to go and from its April high to Tuesday’s low is down 32.1%. Year to date HGX is down 11.7%, which to me supports my call that home prices can decline another 50%.

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.”