Todd Market Forecast 10/11/7

Todd Market Forecast Stock Market Update for Wednesday 10/10/07
www.toddmarketforecast.com

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

DOW - 85 on 200 net declines
NASDAQ COMP. + 8 on 250 net declines

SHORT TERM TREND Bearish
INTERMEDIATE TERM TREND Bullish


There were some triggers for the Dow decline on Wednesday. Alcoa started the earnings parade with a disappointment. Chevron guided lower and Boeing announced a delay of it’s new 787 jetliner. This, combined with an overbought condition managed to bring the listed averages down. The NASDAQ, on the other hand, managed to hold on an move still higher, helped by Merrill’s raising its price target on Google, but even here, there were more declining issues than advancing ones.

We show e-mail subscribers a chart for the 10 day m.a. of the Composite Gauge. This is a grouping of several short term indicators and when it gets below 9.0, there is a tendency for some sort of decline. Right now it’s in the vicinity of 7.0. This, plus the fact that we are in October, a month known for sharp declines, forces us to be cautious on the short term.

Earnings are starting to come in and disappointments in this arena could be the catalyst. However, we do believe that any multi session decline will give us an opportunity to add to positions since we do believe that the Stock market will be moving higher over the next several months.

Gold inched up aided by mild dollar weakness. Bonds were again flat. We remain bullish on both.



NEWS AND FUNDAMENTALS:

Wholesale inventories rose 0.1% versus an expected rise of 0.3%. On Thursday we get the trade gap, the import price index and initial claims.



BOTTOM LINE:

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

Short term ETF traders are in cash.



OTHER MARKETS

We are on a buy for bonds as of September 27.

We are on a buy for the dollar and a sell for the Euro as of October 8.

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

We are on a sell for crude oil as of October 8.

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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