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Richard Suttmeier is the Chief Market Strategist at www.ValuEngine.com . ValuEngine is a fundamentally-based quant research firm in Newtown, PA. ValuEnginecovers over 7,000 stocks every day.

A variety of newsletters and portfolios containing Suttmeier's detailed research, stockpicks, and commentary can be found HERE.

Oct ober 21 , 2010 Wednesdays Rebound Does Not Al t er My Mark ets Out look

The yield on the 10-Year note is between my monthly pivot at 2.555 and my quarterly andsemiannual risky levels at 2.265 and 2.249. Gold is trading around my monthly pivot at $1343.7between my quarterly value level at $1306.4 and weekly risky level at $1373.6. Crude oil is justabove my weekly pivot at $82.38 with semiannual and monthly risky levels at $83.94 and$84.74. The euro is trying to rally to this weeks risky level at 1.4074. The major equity averagesremain overbought with overhead risky levels. For the Dow my weekly risky level is 11,229, myannual risky level is 11,235, and my semiannual risky level is 11,296. I answer readersquestions on the Dow Theory Buy Signal. I comment on the Feds Beige Book.

10-Year Note (2.475) Weekly, annual and annual value levels are 2.620, 2.813 and 2.999 withmonthly and daily pivots at 2.555 and 2.539, and quarterly and semiannual risky levels at 2.265 and2.249.

Courtesy of Thomson / Reuters

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Comex Gold ($1344.2) Quarterly, semiannual and annual value levels are $1306.4, $1260.8,$1218.7 and $1115.2 with my monthly pivot at $1343.7, and daily and weekly risky levels at $1369.0and $1373.6.

Courtesy of Thomson / Reuters

Nymex Crude Oil ($82.54) My annual value level is $77.05 with daily and weekly pivots at $81.41and $82.38, and semiannual and monthly risky levels at $83.94 and $84.74.

Courtesy of Thomson / Reuters

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The Euro (1.3964) My quarterly value level is 1.3318 with daily and weekly risky levels at 1.3948and 1.4060. My monthly value level is 1.2342 with semiannual risky level at 1.4733.

Courtesy of Thomson / Reuters

Daily Dow: (11,108) Monthly, semiannual, annual and quarterly value levels are 10,857, 10,558,10,379 and 8,523 with daily, weekly, annual and semiannual risky levels at 11,132, 11,229, 11,235,

11,290 and 11,296. My annual risky level at 11,235 was tested at the April 26 th

high of 11,258.01.

Courtesy of Thomson / Reuters

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Reader Questions about Dow Theory1. Do you think the Dow will close above 11,205.03 triggering a Dow Theory Buy Signal? First of

all Dow Transports must also close above 4,806.1 to confirm a Dow Theory Buy. I am notbetting that such a signal will occur, as my longer term forecast is Dow 8,500 before Dow11,500.

2. If the get a Dow Theory Buy signal what is the upside target? If the Dow does not have a monthly close above 11,296 the Dow Theory Buy could become a false signal. I do nothave a specific target above 11,296 as there are no higher risky levels. This happens when amarket goes parabolic, in stocks called a melt-up as all shorts are forced to cover.

3. What would negate a Dow Theory Buy Signal? I will track the weekly chart as the Dow is overbought. A weekly close below the five-week modified moving average with declining MOJO would be the sell signal. The five-week modified moving average is at 10,727 thisweek and will move higher each week.

In sum, I still forecast Dow 8,500 before Dow 11,500 unless theres a Dow Theory Buy Signal. NearTerm I have been projecting Dow 11,235 by Election Day on a Republican victory and QE2 by the Fed.A Dow Theory Buy Signal occurs with Dow Transports closing above its May 3 rd closing high at4,806.1, and then the Dow Industrials closing above its April 26 th closing high at 11,205.03.

The Beige Book Reflects Modest Economic Growth, but Lets Focus on the Headwinds Housing markets remain weak with most Districts reporting sales below year-ago levels.

Reports on prices suggested stability, however. Conditions in the commercial real estate sector were subdued, and construction was expected to remain weak. Lending activity was stable in most Districts.

Bernanke is worried about deflation but thats not evident in the Beige Book. Input costs,

most notably for agricultural commodities and industrial metals, rose further. Shipping rates increased, and retailers in some Districts noted rising wholesale prices. Demand for transportation services appears to have slowed .

Whats Ahead for the Foreclosure Mess? The big banks are saying their paperwork is accurate so foreclosures should commence soon. The attorneys general in all states are investigating whether lenders violated state laws. Evicted homeowners are hiring lawyers for suits against the major lenders. Judges will scrutinize foreclosure documents with skepticism. Congress will hold hearings. All of this remains the fall-out of the Subprime Crisis.

Thats todays Four in Four. Have a great day.

Richard SuttmeierChief Market StrategistValuEngine.com(800) 381-5576

Send your comments and questions to Rsuttmeier@Gmail.com . For more information on our products and services visitwww.ValuEngine.com

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As Chief Market Strategist at ValuEngine Inc, my research is published regularly on the website www.ValuEngine.com . I have daily, weekly, monthly, andquarterly newsletters available that track a variety of equity and other data parameters as well as my most up-to-date analysis of world markets. Mynewest products include a weekly ETF newsletter as well as the ValuTrader Model Portfolio newsletter. You can go HERE to review sample issues andfind out more about my research.

I Hold No Positions in the Stocks I Cover.