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Todd Market Forecast
Wednesday Jan 13, 2010
Available Mon- Friday after 6:00 p.m. Eastern, 3:00 Pacific.
DOW + 54 on 1200 net advances
NASDAQ COMP + 26 on 850 net advances
SHORT TERM TREND Bullish
INTERMEDIATE TERM TREND Bullish
Stocks rebounded on lighter volume on Wednesday so the rally wasn’t all that impressive, but we’ll take it. Helping the market was a weaker dollar, an upgrade of Merck and a solid ten year note auction.
Of course something that never gets mentioned in the press as the very short term oversold condition from yesterday. This is by definition the state of things when we say that we have a system 2 buy signal in the “Bottom Line” section below. Usually, this gives us a couple of days on the upside.
We sold off a bit intraday when the Fed Beige Book reported that credit quality around the nation had deteriorated further, but it soon rebounded.
The dollar is clearly in a downtrend, making a series of lower lows and lower highs. We are oversold, but it is normally a sign of weakness when it gets oversold, bounces and gets oversold again (arrows). If the decline continues, it should be bullish for gold and stocks.
BOTTOM LINE:
Our intermediate term systems are on a buy signal.
System 2 traders, we bought the SSO at 39.92 and the E-mini S&P futures contract at 1134.25. Exit at the close on Thursday.
NEWS AND FUNDAMENTALS:
Crude oil inventories rose 3.7 million barrels, more than the expected rise of 1.5 million. The MBA purchase applications rose 0.8%. Last week the rise was 3.6%. On Thursday we get initial claims and retail sales.
OTHER MARKETS
We’re on a buy for bonds as of Jan. 12.
We’re on a sell for the dollar and a buy for the Euro as of January 4.
We’re on a buy for gold as of January 4.
We’re on a buy for silver as of Dec. 16.
We’re on a sell for Copper as of Jan. 12.
We’re on a buy for crude oil as of December 23.
We are long term bullish for all major world markets, including those of the U.S., Britain, Canada, Germany, France and Japan.
