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Todd Market Forecast Stock Market Update for Thursday 08/16/07
www.toddmarketforecast.com
Available Mon- Friday after 6:00 p.m. Eastern, 3:00 Pacific.
DOW - 16 on 800 net declines
NASDAQ COMP. - 8 on 550 net declines
SHORT TERM TREND Bullish.
INTERMEDIATE TERM TREND Bearish.
Market Commentary
The stock market experienced a high volume reversal today and this
normally has short term bullish implications. The Dow was down over 340
points at one time and almost broke even at the close. Unless another
piece of horrible news hits, we would expect several days on the upside
from here and we have changed the short term designation to bullish.
Much to our dismay, our exit parameters were met for moving out of
mutual funds. This was because the S&P was down at 3:00 Eastern time. If
we had designated 4:00, we would still be invested. We chose 3:00
because many mutual funds require an hour notice to get out. We won't
make that mistake again. Next time we will use the readings at the
close since this is what our indicators are based on.
When the market is this oversold, there is almost always a retest
of the lows after the initial rally. At that time we will make a
judgment about getting back in. The Dow has rallied 682 points or a
little under 6% since our latest intermediate term buy last October. And
we do believe that it will be considerably higher by January so we will
be looking to get reinvested when the time is appropriate. That
shouldn't be far off.
The chart below shows the reversal and the volume. This tends to
have bullish short term implications.
Gold got hammered because hedge funds needed to sell anything they
could lay their hands on to meet redemptions. We're going to hang on to
the bullish case for now. Bonds surged again in a flight to safety.
NEWS AND FUNDAMENTALS:
Housing starts were 1.38 million. The expectation was for a reading
of 1.40 million. Building permits were 1.37 million, less than the
expected 1.40 million. On Friday we get consumer sentiment.
BOTTOM LINE:
Our S&P and NASDAQ intermediate term systems moved to a sell signal.
Mutual fund investors should be 100% in cash. We’re looking for a good
market into January so we don’t intend to remain on the sidelines for
long.
ETF traders are in cash. Let’s look to get in on retest.
OTHER MARKETS
We are on a buy signal for bonds as of June 15.
We are on a buy for the dollar and a sell for the Euro as of July 27.
We are on a buy for gold as of July 30.
We are on a sell for crude oil as of August 6.
We are long term bullish for all major world markets, including those of
the U.S., Britain, Canada, Germany, France and Japan.
STEPHEN TODD
http://www.decisionpoint.com/TAC/TODD.html
