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Todd Market Forecast for Wednesday Jan 20, 2010
Available Mon- Friday after 6:00 p.m. Eastern, 3:00 Pacific.
DOW - 122 on 1550 net declines
NASDAQ COMP - 29 on 1300 net declines
SHORT TERM TREND Bullish
INTERMEDIATE TERM TREND Bullish
Overnight, Chinese authorities moved to restrict bank lending to cool their economy down and the markets didn’t like it. The Shanghai index dropped 3% and the carnage spread to Europe and finally to our markets.
Concern over Chinese tightening and the situation in Greece caused money to flow out of the Euro and into the U.S. dollar. Yesterday the markets ignored dollar strength, but with the greenback up a very sharp 1.15%, they could no longer do it.
Still, the U.S. markets came back to close well off the lows.
Remember the indicator that we discussed yesterday? In the short history shown, readings of 70 and over seemed to suggest a short term rally. Well, today it closed at 75. We’ll see what happens on Thursday.
Until today, the U.S. dollar was making a series of lower highs, but that changed on Wednesday. We’re tempted to move our designation from sell to buy, but we have to also note that we are near a previous high and that may provide resistance. We’ll have to pay close attention.
The strong greenback took its toll on gold, silver, copper and crude oil. Bonds moved higher on the session.
BOTTOM LINE:
Our intermediate term systems are on a buy signal.
System 2 traders, we sold the E-mini at 1134.25 for a gain of 3.50. We sold the SSO at 39.85 for a gain of .20.
We had a really nice profit at yesterday’s close and gave most of it back today. So I have an idea.
We generated another system 2 buy at the close on Wednesday. Buy the E-mini or the SSO at the opening on Thursday. We’ll hold until Friday’s close unless, the Dow is up by more than 100 points with five minutes to go before the close on Thursday in which case go ahead and sell at that time.
NEWS AND FUNDAMENTALS:
The PPI rose 0.2%, more than the expected flat reading. Housing starts were 557,000 annualized, less than the expected 572,000. Building permits were 653,000, more than the consensus 580,000. On Thursday we get jobless claims, the Philadelphia Fed Index and leading indicators.
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.
STEPHEN TODD
A SHORT BIOGRAPHY
Editor and publisher of the Todd Market Forecast, a monthly stock market newsletter with an included nightly hotline.
Steve has published articles on the stock market in the following publications: Barron’s, Stock Market Magazine, Futures Magazine, The National Educator, and others.
His stock market commentary is heard on the following stations: CNBC, Bloomberg, CNNfn, Associated Press Radio, Business Radio Network, CKNW in Vancouver, British Columbia, KFWB, Los Angeles and ROBTV in Toronto, Ontario.
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TODD MARKET FORECAST
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