February 17, 2012

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MARKET OVERVIEW

Index
DJIA NASDAQ RUSSELL 2000 S&P 500

started week
12799.11 2926.21 820 1343.06

Thursday Close
12904.1 2959.85 829.96 1358.04

4 day change
104.99 33.64 9.96 14.98

4 day change %
0.82% 1.15% 1.21% 1.12%

ytd
5.62% 13.62% 12.02% 7.99%

Summary of VE Stock Universe

Stocks Undervalued Stocks Overvalued Stocks Undervalued by 20% Stocks Overvalued by 20% 53.56% 46.44% 21.25% 17.42%

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
1.26% 2.22% 1.54% 0.96% 1.35% 1.22% 0.96% 1.36% 1.28% 1.16% 1.07% 1.22% 1.05% 0.75% 1.50% 1.02%

MTD
1.09% 5.50% -0.10% 1.65% 4.77% 4.32% 3.64% 3.19% 2.92% 2.29% 2.94% 1.93% 4.21% 3.58% 4.50% 1.67%

YTD
7.33% 19.97% 11.68% 9.31% 15.55% 16.10% 12.13% 7.90% 10.61% 12.91% 11.10% 12.08% 8.69% 10.70% 13.46% 3.21%

Valuation
12.06% overvalued 4.48% overvalued 5.92% overvalued 6.15% overvalued 20.07% overvalued 1.75% undervalued 5.76% overvalued 11.20% overvalued 19.49% overvalued 12.36% overvalued 17.96% overvalued 16.49% overvalued 9.07% overvalued 18.35% overvalued 10.46% overvalued 12.25% overvalued

Last 12MReturn
-5.88% 19.73% -23.15% 2.29% -3.64% -14.09% -1.78% -6.10% N/A -3.58% -7.77% 6.49% -12.76% 5.87% -10.62% 0.20%

P/E Ratio
28.9 31.96 22.05 24.9 43.34 31.1 27.87 23.05 22.3 26.79 40.24 16.04 40.52 21.72 21.87 24.82

Sector TalkBasic Materials

Below, we present the latest data on leading Basic Materials 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 Basic Materials Sector Stocks--Short-Term Forecast Returns

Ticker
NSU KGC GGC ABX CHOP

Name
NEVSUN RESOURCS KINROSS GOLD GEORGIA GULF BARRICK GOLD CP CHINA GERUI ADV

Mkt Price
3.9 11.1 34.44 48.17 4

Valuation(%)
-35.58 -43.53 -73.16 -7.4 -23.22

Last 12-M Retn(%)

-36.59 -34.24 17.62 -2.11 -31.15

Top-Five Basic Materials Stocks--Long-Term Forecast Returns

Ticker
NSU VALE CLF TCK CDE

Name
NEVSUN RESOURCS VALE RIO DO-ADR CLIFFS NATURAL TECK RESOURCES COEUR DALENE MI

Mkt Price
3.9 25.33 68.67 39.55 28.08

Valuation(%)
-35.58 -11.01 -5.64 0.16 -30.84

Last 12-M Retn(%)

-36.59 -24.09 -25.38 -31.05 8.71

Top-Five Basic Materials Stocks--Composite Score

Ticker
CDE VGZ CE AU ABX

Name
COEUR DALENE MI VISTA GOLD CORP CELANESE CP-A ANGLOGOLD LTD BARRICK GOLD CP

Mkt Price
28.08 3.53 51.79 42.65 48.17

Valuation(%)
-30.84 -52.76 -3.71 -16.12 -7.4

Last 12-M Retn(%)

8.71 18.86 19.11 -7.1 -2.11

Top-Five Basic Materials Stocks--Most Overvalued

Ticker
EXK CDTI DQ CHMT FBR

Name
ENDEAVOUR SILVR CLEAN DIESEL DAQO NEW ENERGY CHEMTURA CORP FIBRIA CELULOSE

Mkt Price
10.29 3.17 3.28 14.8 9.62

Valuation(%)
300 300 267.1 173.96 80.16

Last 12-M Retn(%)

46.37 -57.1 -75.74 -15.53 -35.39

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What's Hot--The ValuEngine Forecast 16 Market Neutral Newsletter

The ValuEngine Forecast 16 MNS Portfolio Newsletter is derived from the ValuEngine Diversified Growth Benchmark Portfolio Strategy. This strategy is the product of ValuEngine's academic research team and combines cutting-edge financial analysis and portfolio construction techniques with real-world Wall St. know how. Since inception, the ValuEngine Forecast 16 MNS Portfolio Newsletter has provided a return of 52% while achieving a better Sharpe and Sortino ratios than the S&P 500. In addition, the ValuEngine Forecast Model MNS Portfolio Newsletter beats the S&P 500's overall volatility and had a maximum draw down that was @66% less! Our Forecast 16 Market Neutral Portfolio Newsletter subscribers were alerted to many winning trades over the past few months. Recent changes to the newsletter make this portfolio easier to trade, and we want to remind our clients of the benefits of the market neutral approach and to publicize our recent strong performance.We just re-balanced the portfolio for the month and the long-side results were impressive. Here are the results for the primary and alternate picks:
Position
Long 1 Long 1 Long 1 Long 1 Long 1 Long 1 Long 1 Long 1 Long 1 Long 1 Long 1 Long 1 Long 1 Long 1 Long 1 Long 1 Long 2 Long 2

Ticker
HEI TRW VALE MA WBMD CX LMCA SFD KEY HSC AMLN TXT MMR SHLD GLNG EBR LLL F

Company Name
HEICO CORP TRW AUTOMTV HLD VALE RIO DO-ADR MASTERCARD INC WEBMD HEALTH CP CEMEX SA ADR LIBERTY MDA-LC SMITHFIELD FOOD KEYCORP NEW HARSCO CORP AMYLIN PHARMA TEXTRON INC MCMORAN EXPLOR SEARS HLDG CP GOLAR LNG LTD ELETROBRAS-ADR L-3 COMM HLDGS FORD MOTOR CO

Entry Price 1/18/20 12

54.66 35.58 23.83 345.97 26.63 5.73 84.32 22.6 8.21 20 11.57 21.67 13.35 36.75 41.73 9.91 70.15 11.97

Current Change % Change Price

59 47.43 25.33 393.15 27.6 8.45 86.9 22.72 7.99 23.82 18.07 27.87 13.83 54.86 47.21 11.22 70.77 12.74 4.34 11.85 1.50 47.18 0.97 2.72 2.58 0.12 -0.22 3.82 6.50 6.20 0.48 18.11 5.48 1.31 0.62 0.77 7.94 33.31 6.29 13.64 3.64 47.47 3.06 0.53 -2.68 19.10 56.18 28.61 3.60 49.28 13.13 13.22 0.88 6.43

Sector
AEROSPACE AUTO TIRES TRUCKS BASIC MATERIALS BUSINESS SERVICES COMPUTERS TECHNOLOGY CONSTRUCTION CONSUMER DISCRETIONARY CONSUMER STAPLES FINANCE INDUSTRIAL PRODUCTS MEDICAL MULTI-SECTOR CONGLOMERATES OILS ENERGY RETAIL WHOLESALE TRANSPORTATION UTILITIES AEROSPACE AUTO TIRES TRUCKS

Sector Average
4.41 19.87 2.03 11.45 14.32 26.14 1.61 -1.00 15.11 11.38 32.91 22.23 9.90 42.51 8.68 6.06

Long 2 Long 2 Long 2 Long 2 Long 2 Long 2 Long 2 Long 2 Long 2 Long 2 Long 2 Long 2 Long 2 Long 2

CLF ACN AOL TOL EA EL FCE.A DNPLY VPHM LUK RRC GMCR UPS TEF

CLIFFS NATURAL ACCENTURE PLC AOL INC TOLL BROTHERS ELECTR ARTS INC ESTEE LAUDER FOREST CITY A DAI NIPPON PRIN VIROPHARMA LEUCADIA NATL RANGE RESOURCES GREEN MTN COFFE UTD PARCEL SRVC TELEFONICA S.A.

70.24 53.49 15.04 22.42 17.74 57.54 11.64 10.11 29.47 25.1 54.53 50.87 73.65 17.21

68.67 58.45 18.8 23.5 17.77 56.08 15.47 10.48 32.31 29.08 63.37 69.05 76.76 17.02

-1.57 4.96 3.76 1.08 0.03 -1.46 3.83 0.37 2.84 3.98 8.84 18.18 3.11 -0.19

-2.24 9.27 25.00 4.82 0.17 -2.54 32.90 3.66 9.64 15.86 16.21 35.74 4.22 -1.10

BASIC MATERIALS BUSINESS SERVICES COMPUTERS TECHNOLOGY CONSTRUCTION CONSUMER DISCRETIONARY CONSUMER STAPLES FINANCE INDUSTRIAL PRODUCTS MEDICAL MULTI-SECTOR CONGLOMERATES OILS ENERGY RETAIL WHOLESALE TRANSPORTATION UTILITIES

PRIMARY LONG PORTFOLIO

GSPC

18.52
1293.67 1358.04

S&P500 ALT LONG PORTFOLIO FORECAST 32 LONGS

64.37

4.98 9.93 14.23

Our Diversified Growth Strategy Picked These BIG Winners Last Month! Amylin Pharma (AMLN) Up 56% Sears Holdings (SHLD) Up 49% Cemex (CX) Up 47% Green Mountain Coffee (GMCR) Up 36% TRW Corporation (TRW) Up 33% Forest City (FCE.A) Up 33% Click HERE to Subscribe to Our Best Performing Newsletter If you would prefer to put the power of ValuEngine to work for you at our new full-service money management firm, please contact us Info@VECapitalManagement.com (321) 215-4015 (610) 896-8823

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--(1.984) My annual value is 2.502 with daily and weekly value levels at 2.055 and 2.038, and annual, quarterly and monthly risky levels are 1.903, 1.797, 1.687 and 1.347. Commodities and Forex Comex Gold--($1730.0) Semiannual, annual and weekly value levels are $1659.5, $1635.8, $1575.8, $1593.9 with daily, weekly and quarterly pivots at $1737.5, $1735.0, $1725.5 and $1740.9 and monthly risky level at $1816.4. Nymex Crude--($102.30) Monthly and semiannual value levels are $85.62 and $79.83 with my quarterly pivot at $99.87, and daily, weekly, semiannual and annual risky levels at $103.88, $104.54, $104.84, and $103.58 and $117.00. The Euro--(1.3137) Semiannual, weekly, monthly, and quarterly value levels are 1.2980, 1.2971, 1.2945, and 1.2499 with daily, and annual and semiannual risky levels at 1.3229, 1.4239 and 1.4405. Major Indices Equity Technicals ValuEngine shows that fifteen of sixteen sectors are overvalued ten by doubledigit percentages. The Computer and Technology sector is 20.1% overvalued with a PE ratio of 43.3 times. These statistics sounds bubbly to me! Meanwhile trading ranges remain in place. The S&P 500, Dow Transports and Russell 2000 remain below 2011 highs at 1370.58, 5627.85 and 868.57 respectively with the highs for Transports and small caps being all time highs. My overall neutral zone is between my quarterly value levels at 12,478 Dow Industrials, 1305.4 SPX and 2777 NASDAQ and quarterly / annual risky levels at 1363.2 S&P 500, 5448 Dow Transports and 836.15 Russell 2000.

Equity Fundamentals: 53.6% of all stocks are undervalued / 46.4% of all stocks are overvalued. Back on October 4th - 93.5% of all stocks were undervalued. Fifteen of sixteen sectors are overvalued; ten are overvalued by double-digit percentages (10.4% OV to 20.1% OV.) Back in March 2009 the sectors were undervalued by 33% to 45%. PE Ratios range from 16 times for Multi-Sector Conglomerates to 43.3 times for Computer and Technology. Sectors have shifted to Overvalued from Undervalued Key Levels for the Major Equity Averages Dow --(12,904) Quarterly, annual, monthly and semiannual value levels are 12,478, 12,312, 11,557, 8,425 and 8,336 with quarterly and daily pivot pivots at 12,796 and 12,887, and weekly and annual risky levels at 13,276 and 14,032. S&P 500--(1358.1) Quarterly, monthly and semiannual value levels are 1331.7, 1305.4, 1176.1, 841.7 and 829.9 with a daily pivot at 1356.4, and annual and weekly risky levels at 1363.2, 1391.9 and 1562.9. The May 2, 2011 high is 1370.58. NASDAQ (2960) Quarterly, annual, monthly and semiannual value levels are 2849, 2777, 2698, 2512, 2012 and 1952 with a daily pivot at 2954, and weekly and annual risky levels at 2984 and 3232. NASDAQ 100 (NDX) (2592) Quarterly, weekly, annual, monthly and semiannual value levels are 2471, 2422, 2412, 2300, 2280, 1851 and 1743 with daily, weekly and annual risky levels at 2599, 2610 and 2603. Dow Transports (5263) Monthly and semiannual value levels are 4522, 4407 and 3778 with a daily pivot at 5220, and weekly, quarterly, and annual risky levels at 5498, 5448, 5861 and 6111. The all time high was set at 5627.85 on July 11, 2011. Russell 2000 (829.96) Daily, monthly and semiannual value levels are 819.06, 662.90, 572.90 and 510.81 with quarterly pivots at 824.46 and 829.03, and weekly, and annual risky levels at 843.28, 836.15 and 969.09. The all time high was set at 868.57 on May 2, 2011. The SOX (435.88) Quarterly, monthly, annual and semiannual value levels are 423.32, 390.17, 323.52, 269.80, 277.90 and 194.47 with a daily pivot at 431.79, and weekly and annual risky levels at 444.44 and 520.61. The 2011 high is 474.33 set on February 18, 2011.

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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