Richard Suttmeier's market view will either bum you out or shore up your convictions -- the latter if you're already short or about to be.
No middle of the road analysis here from the chief market strategist for ValuEngine, who screens fundamental data on 5,000 stocks then runs them through a rinse cycle of technical analysis before hanging them out to dry on his proprietary clothes line of death. If that seems a little too "out there" for you, perhaps this will help clarify things:
"Stocks are overvalued fundamentally and overbought technically," says Suttmeier, a nearly four-decade market veteran who began his career as bond trader.
More recently, and on the prescient side, he was warning on housing and real estate in 2005 and 2006, ahead of the bulk of the investing crowd. Gulp. Hang in there ... it only gets worse.
"The May 2nd highs for so many [assets classes] marked a significant top for this market," he says between calls to go to 50% cash. "Something big is happening. I think the Dow goes below 11,500."
His prediction comes as he's pointing to weakening momentum indicators that suggest a slump of this magnitude could last for three to five weeks, if not longer. Suttmeier says he first got jittery on Feb. 18 when every sector he tracks and 65% off his stock universe registered as overvalued. "The technicals are breaking down," he says. "The story is breaking down."
Hear him out and see if you agree. Once you've taken that in, comment below or email us firstname.lastname@example.org.
- technical analysis
- clothes line of death