Todd Market Forecast
by Steve Todd
Todd Market Forecast Stock Market Update for Wednesday 03/21/07
Available Mon- Friday after 6:00 p.m. Eastern, 3:00 Pacific.
DOW + 159 on 2050 net advances
NASDAQ COMP. + 48 on 1350 net advances
SHORT TERM TREND Bullish
INTERMEDIATE TERM TREND Bullish
It has been our experience that when the market rallies because of
a Fed change of position, it doesn't go away immediately. It keeps on
moving higher for a while. This dovetails with our comment from Tuesday
when we stated that, "the market is headed higher".
Just one other point. The Shanghai Composite, the index that
started all of this recent carnage when it dropped 9% in one day in
reaction to Greenspan's recession prediction, closed at a new all time
high the during the previous session, thus making up its entire drop.
The emerging market's ETF, symbol EEM is also very close to making up
the entire decline since late February. Ditto for many European market
ETFs. The U.S. market seems to be lagging.
It was interesting that when the Fed announced that they would hold
interest rates steady, virtually all the talking heads in the financial
media said that the accompanying commentary was more hawkish than
expected and they pointed out the Fed's statement that inflation
remained a concern.
Trouble is, the stock market didn't see it that way and the popular
averages surged sharply higher instantly. That was when the commentators
belatedly discovered that the central bank had taken out the phrase,
"additional firming may be needed". It's amazing that the market saw
this immediately and gapped higher. Talk about speed reading.
One final point. The markets are very overbought so a short term
reaction wouldn't be a shock, but the main bias looks to be up.
NEWS AND FUNDAMENTALS:
There were no economic releases on Wednesday. Crude oil inventories
rose by a greater than expected 4 million barrels. On Thursday we get
the leading indicators.
On the stock front, Adobe Systems and Morgan Stanley beat
estimates and rose 5% and 7%. Air Tran was upgraded by J.P. Morgan and
jumped 10%. Nvidia was upgraded by Goldman Sachs and added 5%.
On the negative side, AAR Corp. and Charming Shoppes sank 10% and
5% on earnings.
BOTTOM LINE:
Our S&P and NASDAQ intermediate term systems are on a buy signal.
Mutual fund investors should be in a 100% invested position.
Short term ETF traders are long the Russell 2000 ETF, symbol IWM
from 77.61. Move your stop to breakeven.
OTHER MARKETS
We are on a buy for bonds as of January 31.
We are on a sell on the dollar and a buy for the Euro as of Feb. 15.
We are on a buy for gold as of March 20.
We are on a sell for crude oil as of March 12.
We are bullish for all major world markets, including those of the U.S.,
Britain, Canada, Germany, France and Japan.
www.toddmarketforecast.com
http://www.decisionpoint.com/TAC/TODD.html
Yippee Ki Yea...so, has spring hs finally arrived?...bigger question is what's next? 
