September 16, 2011

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MARKET OVERVIEW

Index
DJIA NASDAQ RUSSELL 2000 S&P 500

started week
10990.01 2442.86 667.25 1153.5

Thursday Close
11433.2 2607.07 713.51 1209.11

4 day change
443.19 164.21 46.26 55.61

4 day change %
4.03% 6.72% 6.93% 4.82%

ytd
-1.10% -1.62% -9.40% -3.86%

Summary of VE Stock Universe

Stocks Undervalued Stocks Overvalued Stocks Undervalued by 20% Stocks Overvalued by 20% 82.84% 17.16% 50.01% 5.31%

SECTOR OVERVIEW
Sector
Aerospace Auto-Tires-Trucks Basic Materials Business Services Computer and Technology Construction Consumer Discretionary Consumer Staples Finance Industrial Products Medical Multi-Sector Conglomerates Oils-Energy Retail-Wholesale Transportation Utilities

Change
1.32% 1.97% 0.51% 0.99% 0.85% 1.23% 0.63% 0.77% 1.18% 0.98% 1.04% 0.47% 1.19% 0.32% 0.90% 0.95%

MTD
-3.63% -1.62% -2.33% 0.01% 0.63% -2.83% -0.79% -1.63% -0.97% -1.93% -0.78% -3.10% -2.47% 0.22% -1.56% -1.65%

YTD
2.65% -28.93% -15.05% -6.49% -8.05% -25.39% -10.73% -14.24% -9.81% -14.24% -3.43% -14.58% -16.01% -2.20% -14.34% -3.22%

Valuation
19.13% undervalued 22.61% undervalued 19.23% undervalued 19.09% undervalued 20.03% undervalued 26.13% undervalued 18.66% undervalued 14.62% undervalued 19.24% undervalued 20.82% undervalued 23.05% undervalued 16.62% undervalued 18.83% undervalued 15.73% undervalued 17.02% undervalued 5.51% undervalued

Last 12MReturn
6.77% 15.16% 21.53% 5.21% 11.02% -10.19% 9.80% 4.02% -0.12% 12.39% 8.15% 6.56% 24.76% 16.61% -4.23% 9.14%

P/E Ratio
16.71 17.42 30.5 38.72 32.93 35.78 25.08 16.04 23.78 22.84 25.05 21.13 36.69 24.71 21.3 24.69

Sector TalkTech
Below, we present the latest data on leading Computer and Technology Sector stocks 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 Computer and Technology Stocks--Short-Term Forecast Returns

Ticker
PHG CALX OCLR SABA AATI

Name
KONINKLIJKE PHL CALIX INC OCLARO INC SABA SOFTWARE ADV ANALGC TECH

Mkt Price
18.48 12.48 4.4 6 4.48

Valuation(%)
-42.2 -44.42 -65.2 19.71 -14.13

Last 12-M Retn(%)

-36.12 -6.17 -68.86 6.95 32.15

Top-Five Computer and Technology Stocks--Long-Term Forecast Returns

Ticker
PHG CALX OCLR AMSC SABA

Name
KONINKLIJKE PHL CALIX INC OCLARO INC AMER SUPERCON SABA SOFTWARE

Mkt Price
18.48 12.48 4.4 6.01 6

Valuation(%)
-42.2 -44.42 -65.2 -75 19.71

Last 12-M Retn(%)

-36.12 -6.17 -68.86 -79.24 6.95

Top-Five Computer and Technology Stocks--Composite Score

Ticker
ALU DELL CMVT JBL HPQ

Name
ALCATEL ADS DELL INC COMVERSE TECH JABIL CIRCUIT HEWLETT PACKARD

Mkt Price
3.32 15.31 7.3 17.64 23.27

Valuation(%)
-61.9 -30.61 -65.73 -33.23 -49.64

Last 12-M Retn(%)

14.48 24.47 36.19 42.14 -40.85

Top-Five Computer and Technology Stocks--Most Overvalued

Ticker
EGHT MSTR SINA CUTR TLAB

Name
8X8 INC MICROSTRATEGY SINA CORP CUTERA INC TELLABS INC

Mkt Price
4.72 118.76 110.15 7.86 4.47

Valuation(%)
170.42 152.84 120.54 105.62 99.21

Last 12-M Retn(%)

168.18 40.88 139.93 7.97 -39.45

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Free Report Download for Subscribers

As a bonus to our Free Weekly Newsletter subscribers, we are now offering a FREE DOWNLOAD of one of our $ 25.00 Detailed Valuation Reports.
This week's free download is our report on UBS AG (UBS). UBS is a client-focused financial services company that offers a combination of wealth management, asset management and investment banking services on a global and regional basis. UBS AG is the parent company of the UBS Group (Group). The operational structure of the Company comprises five segments: Wealth Management, Retail & Corporate, Wealth Management Americas, Global Asset Management and the Investment Bank. As of December 31, 2010, it operated about 907 business and banking locations worldwide, of which about 43% were in Switzerland, 41% in the Americas, 11% in the rest of Europe, Middle East and Africa, and 5% in Asia-Pacific. Of the business and banking locations in Switzerland, 36% were owned directly by UBS, with the remainder, along with most of UBSs offices outside Switzerland, being held under commercial leases.

Weekly Subscribers can download a FREE Detailed Valuation Report on UBS HERE. If you have not subscribed and want to be able to receive a FREE $ 25.00 Detailed Valuation Report, you can subscribe to our Free Weekly Newsletter HERE.

What's Hot
Yaron Sadan of Osher Capital on Currencies
ValuEngine is pleased to announce another addition to our stable of high quality investment newsletters. Our latest premium newsletter comes to us from Yaron Sadan and is called "The Hard Trade." Sadan is the founder and president of Osher Capital Advisors, LLC (Osher). Before starting Osher, Sadan worked in the private wealth management group of Goldman Sachs.

All Eyes on the Euro Well, maybe its just my eyes that are glued to the euro. First, I increased my short euro position, so maybe theres some confirmatory bias in looking at it more closely, but Im not sure thats it. Second, is the fact that European banks are starting to feel the inevitable crunch Im pretty sure THATs the real reason.

The euro is sitting on the 200 DMA, and while Im not a technical expert, I assume that it might bounce or it might break down. A bounce would imply that the markets begin trusting the European leadership and more importantly see the long term prospects of the euro improving. This seems highly unlikely. I guess a bounce could also be a coordinated effort by central banks to artificially bolster the currency. This seems pretty likely, but its a risk Im willing to take in order to participate in the alternative. Namely, a breakdown would imply that markets are finally coming to grips with mismatched leadership that is pulling the currency in different directions (EU monetary authorities and local/regional fiscal authorities are facing opposite mandates).

I have a feeling that eventually, the fiscal authorities will feel more pressure from their constituents, which will in turn force their hands, and force a repricing of the euro with the hopes of stimulating some economies. Germany, as the strongest economy in the region, has set the tone for the direction and will continue to do so, except that now, their tone is shifting. Specifically, Germans are less inclined to continue bailing out the other nations and the banks. So, while on a short term basis the G7 currencies are rigged, in the medium to long term, the euro will be forced down by its own weight. Can the US markets rally with a currency crisis? Can the US banks NOT be impacted by the euros coming collapse? Can the European turmoil be contained? The answer is a resounding NO.

The Hard Trade Premium Newsletter is now available on our website HERE

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--((2.083) Semiannual, annual, monthly and quarterly value levels are 2.414, 2.690, 2.715 and 3.053 with a daily pivot at 2.006, and weekly and semiannual risky levels at 1.687 and 1.672. Commodities and Forex Comex Gold--($1792.4) Monthly, quarterly and semiannual value levels are $1702.3, $1655.8 and $1644.8 with a daily pivot at $1777.5, and weekly risky level at $1940.3. Note the potential doubletop on the daily chart.

Nymex Crude-- ($89.26) My weekly value level at $79.87 with a daily pivot at $90.58, the 50-day and 200-day simple moving averages at $90.56 and $95.48, my annual pivots at $99.91 and $101.92 and quarterly, semiannual and monthly risky levels at $102.40, $103.92 and $104.23. The Euro--(1.3886) My daily value level is 1.3473 with my quarterly pivot at 1.3728, and weekly, semiannual and monthly risky levels at 1.4223, 1.4752 and 1.4872. Major Indices Equity Technicals The weekly charts for the major equity averages shift to positive given weekly closes above the five-week modified moving averages at 11,471 Dow Industrials, 1204.6 SPX, 2548 NASDAQ, 2204 NDX, 4675 Dow Transports, 718.90 Russell 2000 and 360.36 Philadelphia Semiconductor Index (SOX). The SOX which has lagged all year is the leader given weekly positive closes. My trigger to confirm the August 9th lows as the low end of trading ranges are closes today above my annual pivots at 11,491 Dow and 1210.7 SPX. For the Dow Industrials the upper end of the trading range expands to the 50-day simple moving average at 11,708 and perhaps to the 200- day simple moving average at 12,000. Mixed weekly closes are neutral. Equity Fundamentals: Stocks are undervalued. 82.8% of all stocks are undervalued / 17.2% of all stocks are overvalued. In March 2009, 91.1% of all stocks were undervalued. All sixteen sectors are undervalued, fifteen by double-digit percentages, five by 20.0% to 26.1%. Back in March 2009 the sectors were undervalued by 33% to 45%.

Key Levels for the Major Equity Averages Dow -- (11,433) Daily and weekly value levels are 11,231 and 10,379 with the 200-week and 120- month simple moving averages at 10,683 and 10,591, my annual pivot at 11,491, and monthly risky level at 12,779. Semiannual value levels are 9,635 and 8,468 with the 50-day and 200-day SMA death cross at 11,708 and 12,000. S&P 500--(1209.1) Daily, weekly and Semiannual value levels are 1191.8, 1083.5, 981.3 and 855.7 with my annual pivot at 1210.7 and monthly risky level at 1342.1. NASDAQ (2607) Daily, annual, weekly, and semiannual value levels are 2594, 2335, 2298, 2199 and 2049 with monthly risky level at 2827. NASDAQ 100 (NDX) (2287) Daily, weekly, semiannual and annual value levels are 2278, 2058, 1951, 1861 and 1723 with monthly risky level at 2431. Dow Transports (4665) Daily, semiannual, weekly, and semiannual value levels are 4567, 4335, 3945 and 3868 with annual and monthly risky levels at 5179 and 5190. Russell 2000 (713.50) Daily, weekly and semiannual value levels are 708.14, 599.17, 577.47 and 530.04 with annual and monthly risky levels at 784.16 and 825.19. The SOX (381.09) Daily, weekly, annual and semiannual value levels are 382.30, 323.64, 270.98, 258.97 and 204.67 with monthly risky level at 418.07.
Note: For my technical momentum metrics--"MOJO"--I use whats called 12x3x3 slow stochastic readings from daily, weekly and monthly charts. The scale is zero to 10.0 where above 8.0 is overbought and below 2.0 is oversold.

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We provide a variety of means for accessing ValuEngine market analysis and other content. You can find us on some of the leading financial media websites as well as the more popular social media services. While our own website ValuEngine.com provides access to lots of analysis--and you can always sign up to receive email daily and weekly bulletins HERE, some users prefer to download PDF reports of content while others prefer to garner info while browsing the web. Our Chief Market Strategist Richard Suttmeier is a prolific market observer and you can find his content in a variety of places. His weekly column on Forbes provides insights into his "Buy and Trade" strategy while his daily market analysis can be followed and accessed at Scribd, Twitter, and Minyanville. Senior Editor Steve Hach re-posts PDFs and web-accessible copies of Daily and Weekly ValuEngine bulletins at Seeking Alpha and Scribd. In most cases, you can receive notification of VE content posting by Suttmeier and Hach by following the ValuEngine feed on twitter @ValuEngine. Links for this content are provided below, you may also find these links on our website HERE Intelligent Investing with Richard Suttmeier Articles by Richard Suttmeier | Articles by Steve Hach Newsletters, Articles and Other Research Pieces Articles by Richard Suttmeier | Articles by Steve Hach Get short, timely messages from ValuEngine Inc Daily Bulletin PDFs, Weekly Newsletter PDFs, and PDF Research Reports