teknobucks
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Todd Market Forecast Stock Market Update for the close on Thursday
02/17/05
STOCK MARKET ANALYSIS:
When the stock market showed unexpected weakness in early January, I
made a mental note to watch the next rally very carefully with an eye to
perhaps getting out of intermediate term positions. Here's what it looks like.
The decline has been fully re traced by the Dow and S&P 500, but the
Nasdaq, Value Line and Russell 2000 are trailing far behind. The high tech
ETF, symbol XLK, is really lagging, being a full 7% off its December high.
We don't like it when the high techs are bringing up the rear.
We are going to give some instructions for potentially getting out of
intermediate term positions in the "bottom line" section below. We have
some problems with doing this since the daily advance decline line is
making new all time highs and we continue to believe that the year 2005 will
be a good one. However, if we can avoid a five or six percent decline, we
want to strongly consider it.
For Friday, we note that the last trading day before the President's Day
weekend has seen the Dow drop 11 times out of the past 13.
NEWS AND FUNDAMENTALS:
The leading indicators were down 0.3%. Expectations were for a decline
of 0.2%. The Philadelphia Fed Index came in at 23.9 which beat the
consensus 17.5 and January's figure of 13.2. Initial claims came in better
than expected. 302k versus 351k.
On the stock front, Brocade Communications, Panera Bread, Reliance
Steel, Stamps.com and Target beat estimates and rose 5%, 10%, 12%, 18%
and 3%. TRW equaled estimates and guided higher. The stock added 3%.
Matel was upgraded by Lehman Brothers and moved higher by 2%.
On the negative side, Radio Shack came up short on earnings and lost
10%. Administaff lost 13% after a downgrade by JMP Securities. Bally
Total Fitness gave up 7% as a result of a criminal accounting probe.
Hanover Compressor was downgraded by C.S. First Boston and sank 6%
and finally, O'charles was downgraded by Raymond James and dropped 5%.
BOTTOM LINE:
Our S&P and NASDAQ intermediate term systems are on a buy signal.
Mutual fund investors are 100% invested in a growth or index fund of their
choice. On Thursday, if the S&P 500 is down at 3:00 P.M. EST which is an
hour before the close, move to a 100% cash position.
SPY and QQQQ traders are in cash. Stay there for now.
For new subscribers, the QQQQ and SPY are exchange traded funds or
Spiders.
The former mimics the Nasdaq 100 and the latter mimics the S&P 500. ----
Additionally, an m.i.t. order means “market if touched” It means that your
order becomes a market order if the price is touched.
OTHER MARKETS
We are on a buy signal for bonds.
We are on a buy for the dollar and a sell for the Euro.
We are on a sell signal for gold.
We remain long term positive on all major world markets, including those of
the U.S., Canada, Germany, France and Japan.
STEVE TODD
Todd Market Forecast Stock Market Update for the close on Thursday
02/17/05
STOCK MARKET ANALYSIS:
When the stock market showed unexpected weakness in early January, I
made a mental note to watch the next rally very carefully with an eye to
perhaps getting out of intermediate term positions. Here's what it looks like.
The decline has been fully re traced by the Dow and S&P 500, but the
Nasdaq, Value Line and Russell 2000 are trailing far behind. The high tech
ETF, symbol XLK, is really lagging, being a full 7% off its December high.
We don't like it when the high techs are bringing up the rear.
We are going to give some instructions for potentially getting out of
intermediate term positions in the "bottom line" section below. We have
some problems with doing this since the daily advance decline line is
making new all time highs and we continue to believe that the year 2005 will
be a good one. However, if we can avoid a five or six percent decline, we
want to strongly consider it.
For Friday, we note that the last trading day before the President's Day
weekend has seen the Dow drop 11 times out of the past 13.
NEWS AND FUNDAMENTALS:
The leading indicators were down 0.3%. Expectations were for a decline
of 0.2%. The Philadelphia Fed Index came in at 23.9 which beat the
consensus 17.5 and January's figure of 13.2. Initial claims came in better
than expected. 302k versus 351k.
On the stock front, Brocade Communications, Panera Bread, Reliance
Steel, Stamps.com and Target beat estimates and rose 5%, 10%, 12%, 18%
and 3%. TRW equaled estimates and guided higher. The stock added 3%.
Matel was upgraded by Lehman Brothers and moved higher by 2%.
On the negative side, Radio Shack came up short on earnings and lost
10%. Administaff lost 13% after a downgrade by JMP Securities. Bally
Total Fitness gave up 7% as a result of a criminal accounting probe.
Hanover Compressor was downgraded by C.S. First Boston and sank 6%
and finally, O'charles was downgraded by Raymond James and dropped 5%.
BOTTOM LINE:
Our S&P and NASDAQ intermediate term systems are on a buy signal.
Mutual fund investors are 100% invested in a growth or index fund of their
choice. On Thursday, if the S&P 500 is down at 3:00 P.M. EST which is an
hour before the close, move to a 100% cash position.
SPY and QQQQ traders are in cash. Stay there for now.
For new subscribers, the QQQQ and SPY are exchange traded funds or
Spiders.
The former mimics the Nasdaq 100 and the latter mimics the S&P 500. ----
Additionally, an m.i.t. order means “market if touched” It means that your
order becomes a market order if the price is touched.
OTHER MARKETS
We are on a buy signal for bonds.
We are on a buy for the dollar and a sell for the Euro.
We are on a sell signal for gold.
We remain long term positive on all major world markets, including those of
the U.S., Canada, Germany, France and Japan.
STEVE TODD
