Todd Market Forecast for Wednesday (07/22/09)
www.toddmarketforecast.com
Available Mon- Friday after 6:00 p.m. Eastern, 3:00 Pacific.
DOW - 35 on 350 net advances
NASDAQ COMP. + 10 on 600 net advances
SHORT TERM TREND Bullish
INTERMEDIATE TERM TREND Bullish
We finally managed a rare down session, but even here, there were more advancing issues than declining ones so it was a Pyrrhic victory for the bulls.
The news is good, but earnings are more a result of cost cutting rather than increased sales so there is some nervousness.
I think what is happening is that a lot of managers missed the rally from March 9 and when the incipient head and shoulders formation was aborted, they decided that they couldn’t afford to miss another move and they all piled in, taking advantage of every two hour pullback to get on board.
Also, short sellers were caught flat footed when the head and shoulders formation failed and they’ve been forced to buy back in. If this analysis is true, it’s not all that healthy for the markets, but we’ll let the chart formation govern us.
In the meantime, 4 day RSI is about as overbought as it ever gets (arrow). Several other momentum gauges are in the same boat. The next few days should be quite interesting.
Gold was higher along with the yen. Bonds, the dollar and crude oil were lower for the session.
BOTTOM LINE:
Our intermediate term systems are on a buy signal.
Short term traders are in cash. Stay there on Thursday. We need some weakness for a buy.
NEWS AND FUNDAMENTALS:
Crude oil inventories dropped 1.8 million barrels, less than last week’s drop of 2.8 million barrels. The MBA home loan application index came in at 262.1, more than the previous reading of 258.8. Mortgage rates rose to 5.31% for a 30 year fixed from last week’s 5.05%.
OTHER MARKETS
We’re on a buy for bonds as of July 21.
We’re on a sell for the dollar and a buy for the EURO as of July 15th.
We’re on a buy for gold as of July 13th.
We’re on a buy for crude oil as of July 15th.
We are long term neutral 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. We were ranked ranked # 1 for the past ten years at the end of 2003, 2004 and 2005. At the end of 2006 we slipped to #3 and at the end of 2007, we were ranked # 5.
TODD MARKET FORECAST
P.O. Box 4131
Crestline, CA 92325-4131
www.toddmarketforecast.com
e mail – toddmarketforecast@charter.net
phone 909 338 - 8354
