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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.

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May 17, 2012 Oversold c ondi t i ons on dai ly char t s for a l l US Capi ta l Mar ket s

Markets in Review: Asian stocks were mixed on Thursday. The Nikkei 225 ended their session at8,877 up 0.86% on the day. The Hang Seng ended their session at 19,201 down 0.31% on the

day. European exchanges are lower this morning after ending Wednesday mixed. The FTSE 100ended Wednesday at 5,405 down 0.60%. The DAX ended Wednesday at 6,384 down 0.26%. TheCAC 40 ended Wednesday at 3,049 up 0.31%. The yield on the 10-Year US Treasury declined toanother YTD low at 1.747 percent on Wednesday versus the cycle low at 1.671 set on September 23,2011. Gold traded down to a new year to date low of $1526.7 the Troy ounce on Wednesday versusmy monthly value level at $1525.8. Crude oil traded down to $91.81 per barrel on Wednesday. Theeuro versus the dollar traded down to 1.2684. The decline in yields is overdone on its daily chart. Goldand Crude oil are oversold. The euro is oversold. All major averages are oversold.

Todays Four in Four Key Levels:1. Yields The yield on the 10-Year US Treasury is below my semiannual pivot at 1.903 with

monthly and weekly risky levels at 1.734 and 1.726. Declining yields is overdone.2. Commodities Gold has a monthly value level at $1525.8 the Troy ounce with annualpivot at $1575.8 and weekly risky level at $1612.6. The Death Cross that signaled thisdown side began on April 17th. For Crude oil my semiannual value level is $79.83 with aweekly pivot at $95.76, and the 200-day SMA at $96.24. Both gold & crude are oversold.

3. Currencies The euro versus the dollar shows a monthly value level at 1.2257 with mysemiannual pivot at 1.2980. The euro is oversold on its daily chart.

4. Equities The Dow Industrial Average is below my quarterly and weekly pivots at 12,794and 12,798 with my annual value level at 12,312. The S&P 500 is below quarterly andannual pivots at 1337.7 and 1363.2. The NASDAQ is below my quarterly pivot at 2911 withmy annual value level at 2698. Dow Transports stayed above my weekly value level at5085. The Russell 2000 is below my weekly pivot at 786.76. My prediction remains thatDow Transports and Russell 2000 will not return to their lag 2011 all time highs at 5627.8set on July 7, 2011 and 868.57 set on May 2, 2011 in 2012. All have oversold daily charts.

5. ValuEngine Valuations Stocks remain cheap fundamentally with 72.0% of all stocksundervalued, but keep in mind that on October 4th 93.5% were undervalued. A factor isthe low 30-Year bond yield at 2.90%. Nine sectors are undervalued with 11 overvalued.Autos-Tires-Trucks 22.5% UV, Basic Materials 21.6% UV. Oils-Energy 13.1% UV.

VE Morning Briefing If you want expanded analysis of the US Capital Markets go to this link andsign up: http://www.valuengine.com/nl/mainnl?nl=D