The Multi-Year Bear Market: Led by Housing and Community Banks

Richard Suttmeier submits: Supply weighs on risk aversion for US Treasuries. Dollar strength, euro weakness hits gold, copper and crude oil. The weekly chart for the Dow Industrial Average, and housing, and community and regional banksThe US Treasury announced $81 billion in note auctions for next week.

Richard Suttmeier submits: The decline in the 10-Year Treasury yield should end between 2.999 and 2.813. There is limited if any additional gains for Gold relative to its June 21st all time high at $1266.5 . Crude has been struggling to sustain gains above my annual pivot at $77.05. Further downside for the euro should be limited to my new quarterly support at 1.1424.

Richard Suttmeier submits: The yield on the US 10-Year note is still between my annual levels at 2.999 and 2.813. Comex gold is trading below $1200 supporting my view of a struggle to return to its June 21st high of $1266.5. Nymex crude oil is below my annual pivot at $77.05. The euro is shy of my monthly resistance at 1.2670. For the Dow a return to my weekly pivot a second time is a coin flip.

Andrew Hart submits:Here's a quick ETF screen I just ran which produced some interesting data. The market was able to avoid the bear market label earlier in the year when it found support after falling 17% from highs. Of course, falling 20% from the highs would mark an official bear market. Despite the save from another bear market there are certain parts of the investment landscape that are already in their own bear market.

I think it was John Templeton who once said "bull markets are born on pessimism, grow on skepticism, mature on optimism, and die on euphoria". Given that:

Richard Suttmeier submits: The popular trades at mid-year: to be short US Treasuries, to be long gold and crude oil, and to be short the euro. These trades seemed to be unwinding over the past two days. On Thursday, the ValuTrader Model Portfolio triggered nine buys on weakness to value levels as all sectors become undervalued by more than 10%. New lows for the move were seen for all of the major equity averages, but the S&P 500 held my annual support at 1014.2.

Michael James McDonald submits: Once the stock market begins to decline after a long advance - like the thirteen month, 82% move off the March 2009 bottom - market analysts and technicians always face the same question. Is the bull move now over and is this decline the beginning of another bear market or is this a high level consolidation prior to another major thrust to new highs? This is the situation we find ourselves in today (see chart). click to enlarge

Richard Suttmeier submits: The Dow Industrial Average opened below my annual support at 10,379. The bulls still say that the strategy is to buy weakness. I began the year in disagreement suggesting to investors on Main Street to sell strength. I decided to track the first three weeks of the year as though it was a Title Bout between the Bull and the Bear.