Todd Market Forecast 9/20/7

Todd Market Forecast Stock Market Update for Wednesday 09/19/07

www.toddmarketforecast.com
Available Mon- Friday after 6:00 p.m. Eastern, 3:00 Pacific.

DOW + 76 on 1000 net advances
NASDAQ COMP. + 15 on 1050 net advances

SHORT TERM TREND Bullish
INTERMEDIATE TERM TREND Bullish



Market Commentary

Today was a solid follow through on increased volume and strongly suggests that the surge yesterday was not a flash in the pan. Breadth was again quite good.

We were impressed that the CBOE put call ratio was just under 1.0. This shows a remarkable amount of bearishness considering how much the market has rallied over the past couple of days. This is echoed by Mark Hulbert’s index of newsletters. He says that they are quite restrained in their bullishness which is a good sign from a contrary opinion standpoint. We pay a lot of attention to sentiment. Investors tend to get bearish at bottoms and bullish at tops. The latter hasn’t happened yet. Right now, we are looking for strength into at least mid January, but probably beyond.

However, after two days of sharp rally, we wouldn’t be shocked by a profit taking pullback perhaps tomorrow, but we feel any weakness should be bought.

In the meantime, the chart shown to e-mail subscribers shows the emerging markets ETF symbol EEM. This index frequently leads the S&P 500 and it is virtually at all time highs once more.

Gold was up again. It’s 5 day RSI is at an extremely overbought 90, but that hasn’t stopped it. Bonds were hit still again. The recent flight to safety is being unwound.



NEWS AND FUNDAMENTALS:

The CPI dropped 0.1%, the expectation was for a flat reading. The core CPI rose 0.2% in line with expectations. Housing starts were 1.33 mln, less than the consensus 1.35 mln. Building permits were 1.31 mln. A reading of 1.34 mln was anticipated. On Thursday we get jobless claims, leading indicators and the Phiily Fed.



BOTTOM LINE:

Our intermediate term systems are on a buy signal. Mutual fund investors are in 100% invested position. ETF investors bought the S&P 500 ETF, symbol SPY at 153.32.


Short term ETF traders are in cash. Stay there for now. We are quite overbought.



OTHER MARKETS

We are on a sell for bonds as of September 13.

We are on a sell for the dollar and a buy for the Euro as of September 11.

We are on a buy for gold as of September 18.

We are on a buy for crude oil as of August 29.

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.

RANKED # 1 BY TIMER DIGEST

Timer Digest of Greenwich, CT monitors and ranks over 100 of the nation’s best known advisory services. If you have heard of an advisor, it is likely that he or she is monitored and ranked by Timer Digest.

Once per year, in January, Timer Digest editor Jim Schmidt gives the rankings for all services monitored for multi year time frames. The latest survey has us ranked # 1 for the past ten years.


TODD MARKET FORECAST
P.O. Box 4131
Crestline, CA 92325-4131
www.toddmarketforecast.com
e mail – toddmarketforecast@charter.net
phone 909 338 - 8354