September 23, 2011

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MARKET OVERVIEW

Index
DJIA NASDAQ RUSSELL 2000 S&P 500

started week
11506.67 2584.35 705.13 1214.99

Thursday Close
10733.8 2455.67 643.42 1129.56

4 day change
-772.87 -128.68 -61.71 -85.43

4 day change %
-6.72% -4.98% -8.75% -7.03%

ytd
-6.97%% -6.26% -16.95% -9.36%

Summary of VE Stock Universe

Stocks Undervalued Stocks Overvalued Stocks Undervalued by 20% Stocks Overvalued by 20% 91.77% 8.23% 70.25% 3.39%

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
-3.09% -5.67% -7.53% -3.10% -3.91% -4.62% -3.75% -3.10% -2.85% -4.41% -2.95% -4.38% -5.63% -2.96% -3.87% -2.96%

MTD
-9.68% -14.67% -14.49% -7.75% -8.29% -12.81% -8.72% -8.11% -9.38% -12.14% -7.61% -10.80% -13.23% -6.79% -12.61% -7.47%

YTD
-1.36% -37.81% -25.17% -13.17% -15.81% -32.83% -18.10% -19.99% -17.34% -22.83% -9.25% -21.70% -25.13% -8.51% -22.87% -8.78%

Valuation
28.05% undervalued 35.58% undervalued 31.44% undervalued 29.37% undervalued 30.97% undervalued 36.05% undervalued 29.28% undervalued 23.59% undervalued 28.44% undervalued 32.73% undervalued 31.66% undervalued 28.09% undervalued 31.81% undervalued 24.81% undervalued 30.36% undervalued 14.24% undervalued

Last 12MReturn
-0.43% 0.68% 6.09% -3.53% -0.63% -18.54% 0.73% -2.05% -6.68% 0.43% 1.87% -3.04% 8.24% 9.94% -13.92% 2.81%

P/E Ratio
15.64 15.31 28.76 34.93 30.87 32.39 23.41 15.29 22.29 20.59 23.61 19.77 33.54 23.21 19.21 23.02

Sector TalkADRs
Below, we present the latest data on leading ADRs from our Institutional software package (VEI). With VEI, you can easily sort the ADRs by national origin and work with them like an individual sector or industry group. Top five lists are provided for each category. These results were filtered by market price and volume--no results below 3$/share or less than 100k shares/day volume.

Top-Five ADRs--Short-Term Forecast Returns

Ticker
PT PHG TEF AMRN SBS

Name
PORTUGAL TELCOM KONINKLIJKE PHL TELEFONICA S.A. AMARIN CORP PLC SABESP -ADR

Mkt Price
7.12 16.87 17.8 10.45 47.62

Valuation(%)
-41.59 -50.79 -42.36 -75 -13.91

Last 12-M Retn(%)

-35.04 -43.33 -20.85 262.85 13

Top-Five ADRs--Long-Term Forecast Returns

Ticker
PT TEF JOBS SBS PHG

Name
PORTUGAL TELCOM TELEFONICA S.A. 51JOBS INC-ADR SABESP -ADR KONINKLIJKE PHL

Mkt Price
7.12 17.8 46.22 47.62 16.87

Valuation(%)
-41.59 -42.36 -38.77 -13.91 -50.79

Last 12-M Retn(%)

-35.04 -20.85 26.91 13 -43.33

Top-Five ADRs--Composite Score

Ticker
AMRN NZT BASFY SNP STO

Name
AMARIN CORP PLC TELECOM CORP NZ BASF AG-ADR NEW CHINA PETRO&CHM STATOIL ASA-ADR

Mkt Price
10.45 10.2 60.06 88.77 20.88

Valuation(%)
-75 -44.73 -45.72 -34.16 -36.76

Last 12-M Retn(%)

262.85 47.83 1.44 6.95 4.71

Top-Five ADRs--Most Overvalued

Ticker
ICLR NOK ENI CHT DCM

Name
ICON PLC NOKIA CP-ADR A ENERSIS S A ADR CHUNGHWA TELECM NTT DOCOMO -ADR

Mkt Price
17.14 5.26 16.67 32.14 18.92

Valuation(%)
55.96 43.52 29.31 7.37 4.75

Last 12-M Retn(%)

-22.97 -43.8 -28.05 55.27 10.45

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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.
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What's Hot
Yaron Sadan of Osher Capital on the Euro Zone
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.

Euro and European Equities arent the Same As the euro continues to disappoint the market, or just live up to my negative expectations, European equities are following the erratic behavior, and for good reason. After all, who wants exposure when the currency translations of earnings can fluctuate 2% over the course of a rumors half-life of 1 hour? So it should not come as a surprise that the European markets as a whole have been struggling.

Thats a 10-year picture. Not so pretty. Which is the type of environment I start to like. Turns out, I can think the currency can have downside potential, but still think equities begin to look attractive. We arent there yet, but its definitely an area Ill want exposure to if valuations continue to decrease.

Look at it another way:

Thats the EZU:SPY spread. Its not at all time lows, but certainly approaching them. With such volatile currency swings, earnings become more fungible and timedependent, and make every international firm a speculator, so I have no particular hurry to go in and stake a position at this time. That being said, I understand the investors stepping up and building positions in certain countries (Germany comes to mind) or even specific companies. However, I think theyre going to face an uphill battle for a while yet. Our goal though should always be to look forward and anticipate. With a value mentality, I am often compelled to act too early, but this is too early even by my standards.

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--((1.711) Daily, semiannual, annual, monthly and quarterly value levels are 1.899, 2.414, 2.690, 2.715 and 3.053 with semiannual and weekly risky levels at 1.672 and 1.460. Commodities and Forex Comex Gold--($1739.3) Monthly, quarterly and semiannual value levels are $1702.3, $1655.8 and $1644.8 with the 50-day SMA at $1741.6, my daily pivot at $1764.0, and weekly risky level at $1970.8. Nymex Crude--($80.32) My weekly value level at $74.97 with the 200-week simple moving average at $83.68, a daily pivot at $83.32, the 50-day at $89.38, 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--(1.3478) No value levels with daily and quarterly pivots at 1.3678 and 1.3728, the 200-day simple moving average at 1.4043, and weekly, semiannual and monthly risky levels at 1.3906, 1.4752 and 1.4872.

Major Indices Equity Technicals The Dow Transports and Russell 2000 with their bearish daily charts pulled the NASDAQ 100 (NDX) and Philadelphia Semiconductor Index (SOX) into the bear camp winning the Bull vs Bear tug of war. The Dow Industrial Average, Dow Transports and Russell plunged below their August 9th lows setting new year-to-date or 52-week lows at 10,597.14, 4095.81 and 634.71. Meanwhile, the S&P 500, NASDAQ, NASDAQ 100 and SOX remain above their August 9th lows at 1101.50, 2331.65, 2034.92 and 325.41. The most important technical is that the Dow Industrial Average held the zone of its 200-week and 120-month simple moving averages at 10,675 and 10,590.

Equity Fundamentals: Stocks are extremely undervalued. 91.8% of all stocks are undervalued / 8.2% of all stocks are overvalued. Stocks are as cheap as they were In March 2009 when 91.1% of all stocks were undervalued. Stocks are cheaper given lower prices and lower 30-Year bond yield. All sixteen sectors are undervalued by double-digit percentages, fifteen by 23.6% to 36.1%. Back in March 2009 the sectors were undervalued by 33% to 45%.

Key Levels for the Major Equity Averages Dow --(10,734) My weekly value level is 10,032 with the 200-week and 120month simple moving averages at 10,675 and 10,590, and daily, annual and monthly risky levels at 11,316, 11,491 and 12,779. Semiannual value levels are 9,635 and 8,468 with the 50-day and 200-day SMA death cross at 11,575 and 11,997. S&P 500--(1129.6) Weekly and semiannual value levels are 1039.6, 981.3 and 855.7 with daily and annual risky levels at 1197.4 and 1210.7, the 50-day at 1216.5 and daily and monthly risky levels at 1214.0 and 1342.1. NASDAQ (2456) Annual, weekly, and semiannual value levels are 2335, 2210, 2199 and 2049 with the 50-day at 2585, and daily and monthly risky levels at 2613 and 2827. NASDAQ 100 (NDX) (2185) Weekly, semiannual and annual value levels are 1989.0, 1951, 1861 and 1723 with the 50-day at 2241, and daily and monthly risky levels at 2319 and 2431. Dow Transports (4150) Weekly value levels are 3868 and 3755 with my semiannual pivot at 4335, a daily risky level at 4556, the 50-day at 4721, and annual and monthly risky levels at 5179 and 5190. Russell 2000 (643.44) Weekly and semiannual value levels are 566.76, 577.47 and 530.04 with a daily risky level at 690.75, the 50-day at 728.53, and annual and monthly risky levels at 784.16 and 825.19. The SOX (352.78) Weekly, annual and semiannual value levels at 306.68, 270.98, 258.97 and 204.67 with the 50-day SMA at 364.78, and daily and monthly risky levels at 385.76 and 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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