'QE Hype' and 'QE Fatigue' Tug of War Continues

Analysis of the S&P 500 (1461.40): The weekly chart remains positive but overbought with a close today above the five-week modified moving average at 1425.6. My annual value level lags at 1363.2 with monthly and quarterly risky levels at 1468.0 and 1513.3. The Sept. 14 QE3 high is 1474.51.

Analysis of the Nasdaq (3149): The weekly chart remains positive but overbought with a close today above the five-week modified moving average at 3090. My annual value level lags at 2698 with monthly, annual and quarterly risky levels at 3210, 3232 and 3295. The Sept. 21 QE3 high is 3196.93.

Analysis of the Russell 2000 (844.65): The weekly chart remains positive but overbought with a close today above the five-week modified moving average at 829.42. My monthly value level is 827.70 with my annual pivot at 836.15 with the Sept. 14 QE3 high at 868.50 and the all time high at 868.57 set on May 2, 2011.

Analysis of the Semiconductor Index (383.65): The weekly chart stays negative on a close today below the five-week modified moving average at 392.72. My semiannual value level is 326.30 with a monthly pivot at 385.39 and the Sept. 14 high at 410.82. The SOX is the second victim of QE fatigue ending Thursday 6.6% below its QE3 reaction high.

If the positive and overbought indices, Dow industrials, S&P 500, Nasdaq and Russell 2000 set new post QE3 highs following Friday's employment data, such could be a cure for QE fatigue. Otherwise we are setup for potential third quarter earnings misses or lowered guidance as QE fatigue trumps QE hype.

At the time of publication the author held no positions in any of the stocks mentioned.

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This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

Richard Suttmeier has an engineering degree from Georgia Tech and a master of science from Brooklyn Poly. He began his career in the financial services industry in 1972 trading U.S. Treasury securities in the primary dealer community. In 1981 he formed the Government Bond Department at LF Rothschild and helped establish that firm as a primary dealer in 1986. Richard began writing market research in 1984 and held positions as market strategist at firms such as Smith Barney, William R Hough, Joseph Stevens, and Rightside Advisors. He joined www.ValuEngine.com in 2008 producing newsletters covering the U.S. capital markets, and a universe of more than 7,000 stocks. Richard employs a "buy and trade" investment strategy and can be reached at [e-mail].

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