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Richard Suttmeier is the Chief Market Strategist at www.ValuEngine.com.ValuEngine is a fundamentally-based quant research firm in Princeton, NJ. ValuEngine

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December 11, 2009 The Dow remains poised for a Breakout

Should the TARP be rolled up? Treasury yields on the rise, the Gold bubble has popped, CrudeOil points to a slowing economy, and the Dow remains poised for a breakout.

The TARP should be rolled up instead of being wasted on failed programs.

After fourteen months the TARP should have prevented foreclosures, and helped small businesses getaffordable credit. TARP failed to accomplish this objective and instead we have 10% unemployment,and Bank Failure Friday, as 130 banks have failed this year, including a few TARP recipients.

Rising Foreclosures are evidence that The Great Credit Crunch continues

The fact that foreclosure filings will total 3.9 million in 2009, up from 3.2 million in 2008 is a signal thatThe Great Credit Crunch continues. Foreclosures would be higher, but banks are reluctant to proceedon the process due to the cost. Community banks are under pressure from several angles: raising

capital, writing down C&D and CRE loans, and having to pay three years of Deposit Insurance Fundfees to the FDIC upfront and by the end of this year.

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Foreclosures declined 8% in November because millions of homeowners are in the midst of beingevaluated to see if they are eligible for a mortgage modification. Its a sad situation when 77,000 homesget repossessed last month alone, when Obamas housing mortgage modification program has helpedonly 10,000 year to date. Talk about Fuzzy Math, the US Treasury claims 31,000 mortgage successes.

The extension of the TARP until October 3, 2010 kicks the problem down the road, and it appears thatthis is the drop dead date for TARP. With foreclosure problems up 18% year over year, additionalwaves of foreclosures are likely right through 2011, which is the date when Alt-A mortgage resets taperoff. As long as unemployment stays high, prime mortgages will continue to join the default list.

Elizabeth Warren, chair of the Congressional Oversight Panel told reporters that TARP is "not working"and that it had failed to make a dent in the record level of foreclosures. More than 14% homeownerswith a mortgage are either late on their payments or in foreclosure.

JP Morgan sees more Credit Losses in 2010 Credit card losses for its Chase portfolio is projectedto be 11% by the end of the first quarter of 2010 and losses in the Washington Mutual portfolio could hit24% over the next several quarters.

Equity Bulls Claim $3 trillion on the sidelines, but mortgage specialists say that homeowners havelost $5.9 trillion in home values since the housing market peak in mid-2006.

In a Bloomberg survey of consumers almost half feel less financially secure since presidentObamas inauguration, and fewer than 33% feel that the economy will improve over the next sixmonths.

The weekly chart for the 10-Year favors higher yields. This yield is headed towards its 200-weeksimple moving average at 4.07 given a close today cheaper than 3.42. Todays support is 3.62.

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Comex Gold remains overbought on its weekly chart. The parabolic bubble has popped. Supports are$1107 to $1094 with my quarterly pivot at $1135, and resistances at $1150 and $1179.

Nymex Crude Oil has a negative weekly chart profile with my annual pivot at $68.81, a daily pivot at$70.33 and the 200-week simple moving average at $75.67.

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The Dollar Index shifts to positive on its weekly chart given a close today above $76. The euro shiftsto negative on its weekly chart given a close today below 1.48. My annual support is 1.4036.

The Dow shows overbought MOJO on its weekly chart. My annual pivot is 10,012 with down trendresistance at 10,550. The down trend resistance drops to 10,520 next week.

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Send me your comments and questions to Rsuttmeier@Gmail.com. For more information on ourproducts and services visit www.ValuEngine.com.

Thats todays Four in Four. Have a great day.

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Richard SuttmeierChief Market Strategistwww.ValuEngine.com(800) 381-5576

As Chief Market Strategist at ValuEngine Inc, my research is published regularly on the website www.ValuEngine.com. I

have daily, weekly, monthly, and quarterly newsletters available that track a variety of equity and other data parameters aswell as my most up-to-date analysis of world markets. My newest products include a weekly ETF newsletter as well as theValuTrader Model Portfolio newsletter. I hope that you will go to www.ValuEngine.com and review some of the sampleissues of my research.

I Hold No Positions in the Stocks I Cover.