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[TTHQ Staff]

Todd Market Forecast Stock Market Update for the close on Thursday 04/28/05

www.toddmarketforecast.com

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

DOW - 128 on 1200 net declining issues

NASDAQ COMP. - 26 on 1500 net declining issues.


STOCK MARKET ANALYSIS:

The market has been getting hit with bad news lately. Today it was first quarter GDP which was weaker than expected and the chain deflator, which measures inflation was higher than anticipated. Of course, it's our belief that economic weakness causes inflation so this wouldn't be a surprise. However, at this time, we would doubt that the economy is getting weaker. These figures are most likely an aberration which we get all the time in the economy.

From a technical analysis standpoint, the bad news is that the Nasdaq, Russell 2000 and Value Line Index have all closed below their mid April lows. We also didn't like the fact that it happened on increased volume. However, there is still a ray of hope. The Dow, S&P 500 and the advance decline line are still above comparable lows. This level held the last decline so we are right on the goal line.

We may have to move to the sidelines again on the intermediate term and admit that we were fooled by the big rally on April 21, but we are still in the bullish camp for the year 2005. Why? Mainly liquidity. Look at our letter for February and the chart on the front page will show you what we mean. True, there's no guarantee that cash on the sidelines will find its way into the stock market, but history says that, at some point, it will.


NEWS AND FUNDAMENTALS:

First quarter GDP rose 3.1%. This was lower than the expected rise of 3.5% and also lower than the 3.8% reading for Q4. Initial claims were 320k which was in line with expectations.

On the stock front, Procter and Gamble, GlaxcoSmithKline, Intersil and Starbucks rose 2%, 5%, 8% and 5% on earnings. Goodrich beat estimates and also guided higher. The stock added 6%. Biogen and Northrup Grumman also reported higher earnings and gained 2% each.

On the negative side, Apache Corp beat estimates, but still lost 2%. Marathon Oil, Estee Lauder, Exxon Mobil, and Stanley Works sank 3%, 9%, 4% and 8% on earnings. Applebee's guided lower and lost 5% and finally, JDS Uniphase had a bigger than expected loss and gave up 10%.


BOTTOM LINE:

Our S&P and NASDAQ intermediate term systems are back on a buy signal as of the close on Thursday, April 21, 2005. Mutual fund investors are 100% invested in a growth fund or S&P 500 Index fund of their choice.

SPY and QQQQ traders are on the sidelines. Let's stay there for the present.

For new subscribers, the QQQQ and SPY are exchange traded funds or Spiders.

The former mimics the Nasdaq 100 and the latter mimics the S&P 500. ---- Additionally, an m.i.t. order means "market if touched" It means that your order becomes a market order if the price is touched.

OTHER MARKETS

We are on a buy signal for bonds.

We are on a buy for the dollar and a sell for the Euro.

We are on a sell signal for gold.

We remain long term positive on all major world markets, including those of the U.S., Britain, Canada, Germany, France and Japan.


About Steve Todd