Todd Market Forecast 11/9/7

Todd Market Forecast Stock Market Update for Thursday 11/08/07
www.toddmarketforecast.com
Available Mon- Friday after 6:00 p.m. Eastern, 3:00 Pacific.

DOW - 34 on 100 net declines
NASDAQ COMP. - 53 on 250 net declines

SHORT TERM TREND Bullish
INTERMEDIATE TERM TREND Bearish


The stock market’s action on Thursday should be bullish for the near term. At one point the Dow was down over 200 points on nothing but bad news and then it came back late in the day for no reason that was apparent. The result was a high volume reversal and this normally portends some sort of a multi session bottom. What we had was a mild version of the reversal on August 16.

One other important point. Even when the averages were at their lowest, breadth wasn’t all that bad, only 1300 net declines. This may mark a change since breadth has been quite negative over the past couple of weeks.

As we said, the news was quite bad. In the early going, Cisco reported that orders from financial institutions were down and this led the market to believe that the sub prime issue was infecting the high tech arena. Then Mr. Bernanke gave a rather sorry performance before a joint session of Congress. Essentially he stated that the economy appeared to be weakening, but gave no assurances about further rate cuts. That’s when the market really began to drop.

When we saw the comeback developing, we were hoping that the S&P which had been down over 25 points would end positive and keep us in on an intermediate term basis, but no such luck. The index was higher with two minutes to go and then it sank to be slightly negative. We are intermediate term bearish by less than a point on the S&P. As a practical matter, I know some of you remained long since it was such a close call.

We may officially go back on the long side soon, but we didn’t like the breakdown for the NASDAQ Composite, even though it also made a late day comeback. We’ll watch from the sidelines for now.

Gold and crude backed up a bit, but still look positive.



NEWS AND FUNDAMENTALS:

Initial claims were 317,000 down from last week’s 330,000. On Friday we get the trade gap, import price index and consumer sentiment.



BOTTOM LINE:

Our intermediate term systems are on a sell signal. Mutual fund investors are in 100% cash position. ETF investors sold the S&P 500 ETF, symbol SPY at 147.14 for a loss of 6.18. Ouch! That was a sow’s ear. Stay in cash for now.

Short term ETF traders are in cash. On Friday, let’s buy the Russell 2000 ETF, symbol IWM at 77.80 or better. Place a stop at 75.80



OTHER MARKETS

We are on a buy for bonds as of November 2.

We are on a sell for the dollar and a buy for the Euro as of October 18.

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

We are on a buy signal for crude oil as of October 12.

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