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[TTHQ Staff]

Todd Market Forecast Stock Market Update for the close on Thursday 07/07/05

www.toddmarketforecast.com

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

DOW + 32 on 300 net advances

NASDAQ COMP. + 7 on 50 net advances

STOCK MARKET ANALYSIS:

At 5:30 a.m. New York time, the news of the terrorist attack in London hit the wires and the S&P futures immediately dropped over 30 points. This is the equivalent of the Dow being down about 250 points. It then bounced, sold off to a higher low and then rallied the remainder of the session.

One thing that may have been a catalyst was the memory of what happened in the aftermath of the Madrid bombing. On March 11, 2004, the Dow dropped 169 points, but the next day it rebounded 112 points. This factoid was circulating on the floor of the exchange and was probably a catalyst for the buying that took place on Thursday. Incidentally, we checked to see what happened on the second trading day after the Madrid bombing and the Dow lost 148 points.

Does that mean Friday will be down? Be aware that tomorrow the non farm payrolls are released. This is the most market moving of all economic reports and if it is a surprise as it is about half the time, it will probably govern trading on Friday.

The other news on Thursday was pretty positive. Oil dropped sharply in spite of the inventory numbers, probably on the theory that people will be traveling less. Short term movements aside, we remain bullish on the intermediate term.


NEWS AND FUNDAMENTALS:

Initial claims rose to 319k which was in line with expectations. Crude oil inventories dropped by 3.61 mln. which was more than the expected drop of 1.61 mln. Gasoline stocks went down 974k. the expectation was for a flat reading. Distillates added 4.1mln. the consensus was for a rise of 1.5mln.

On the stock front, Isonics, which makes bomb detection equipment rose 6%. AnnTaylor Stores, Abercrombie and Fitch, Chico's and the Gap reported strong same store sales and rose 7%, 4%, 5% and 4%. Charming Shoppes and RF Micro Devices guided higher and jumped 10% 4%. Pepsi Bottling added 6% on earnings. D.R. Horton added 4% as a result of increased order flow. Steak N Shake gained 6% after an upgrade by A.G. Edwards.

On the negative side, A.C. Moore Arts and Crafts lost 11% after issuing a warning. Applebee's, Big Lots and Bombay Co. lost 3%, 15% and 8% on disappointing same store sales. Metlife was downgraded by Merrill Lynch, but only lost 1%.


BOTTOM LINE:

Our S&P and NASDAQ intermediate term systems are back on a buy signal as of the close on 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 for now.

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 since April 11, 2005.

We are on a buy for the dollar and a sell for the Euro since March 22, 2005.

We are on a sell signal for gold since April 14, 2005.

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

STEVE TODD

A SHORT BIOGRAPHY


Editor and publisher of the Todd Market Forecast, a monthly stock market newsletter with an included nightly hotline. Steve Todd has a degree in history with a minor in mathematics. This should be a good combination for stock market analysis.

Steve has published articles on the economy and 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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