Richard Suttmeier is the Chief Market Strategist at www.ValuEngine.com.

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October 13, 2009 – Intel and JP Morgan to set earnings trends

Only the Dow reached a new 2009 high on Monday. Today I profile key earnings reports
for today and tomorrow. The Consensus will be wrong on calling Recession’s end.
The major equity averages are testing my zone of resistances two years after all time
highs.
On Monday the Dow reached a new high for the year at 9,931.82, which was shy of my
weekly resistance at 9.967. We have to navigate weekly resistance before challenging annual
resistance at 10,012.
It was two years ago on October 11, 2007 when the Dow peaked at 14,198.10, and would
soon roll over beginning the multi-year bear market.
Weekly resistance on the S&P 500 is 1083.7 versus the September 23rd high at 1,080.15.
Weekly and monthly resistances are 2170 and 2183 on the NASDAQ versus the September
high at 2167.70.
With the consensus so bullish, what can be the catalyst for a sell-off now? A weak
interpretation of the Fed minutes from the September 22 / 23 FOMC meeting. This meeting
marked the prior highs.
Intel reports after the close today on top of upgrades and raised expectations.
Intel is the most important of any earnings report being a Dow, S&P and NASDAQ bellwether.
The stock is rated a BUY according to ValuEngine with fair value at $26.45.
Intel traded as high as $20.65 on Monday matching the high of August 28th. The earnings
reaction will either be a breakout or confirm a double-top for the stock.
ValuEngine projects that the stock will decline to $18.90 over the next twelve months, which
warns that all of the upgrades and raised expectations are priced into share price.
My semiannual pivot is $19.57 with monthly risky level at $21.44.
JP Morgan reports Wednesday morning and are applying Camouflage paint to their
balance sheet.
Big banks have the camouflage to cover up increasing bad real estate and consumer loans.
In addition, JP Morgan has $70 trillion in notional amount of derivative contracts off balance
sheet.
JP Morgan is the most important of the “too big to fail” banks as they have paid back TARP,
and they know how to paint the corners on earnings to appear better off than they actually
are.
ValuEngine rates JP Morgan a HOLD with two important warnings for share price – The stock
is 13.7% overvalued with fair value at $40.52% and the one-year price target is $42.28.
The stock is influenced by semiannual and monthly pivots at $43.82 and $46.31 after an
intraday high of $46.49 set on September 22nd. Like Intel the risk / reward is a double-top or a
break-out.
The National Bureau of Economic Research says Recession in Over
When 80% of high profile economists say the Recession is over, I say it’s not. I consider a
reading of 80% as too bullish. Remember back on March 6th when I called the market bottom
– 85% disagreed.
Without job creation the Recession continues. Earnings are better than expected from fewer
employees.
The NABE says that “The Great Recession is over.” I say that ‘The Great Credit Crunch” will
continue through at least 2011.
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.

Richard Suttmeier
Chief Market Strategist
ValuEngine.com
(800) 381-5576

As Chief Market Strategist at ValuEngine Inc, my research is published regularly on the website
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“I Hold No Positions in the Stocks I Cover.”