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[TTHQ Staff]

Todd Market Forecast Stock Market Update for the close on Thursday 07/14/05

www.toddmarketforecast.com

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

DOW + 72 on 300 net declines

NASDAQ COMP. + 9 on 300 net declines

STOCK MARKET ANALYSIS:

Yesterday we said that we felt the market might have a short term decline mainly because of the overbought condition, however on Thursday, the news was just too good. Retail sales were strong and inflation was very mild. This is exactly the way it should work. Weak economies produce inflation, contrary to conventional wisdom.

Also, a 3 1/2% drop in the price of crude added to the good economic news. The combination was a tonic for the market on Thursday.

However, the internals were again poor. Both the NYSE and Nasdaq had more declining issues than advancing ones. Also, the Russell 2000, which has been one of the leading indices was again in negative territory. Frequently, when a leading index starts to drag, it is a sign of an inflection point. We might also add that the traders on the floor of the NYSE are quite bullish. That is usually a contrary indicator.

We want to reiterate that any decline here is likely to be short term in nature. The intermediate to long term trend remains quite positive.


NEWS AND FUNDAMENTALS:

The CPI was flat versus expectations of a rise of 0.3%. The core rate rose just 0.1%. The anticipation was for a rise of 0.2%. Retail sales jumped 1.7%. Ex autos, the figure was 0.7%. The consensus was for a rise of 0.5%. Intial claims were a bit higher at 336k. The expectation was for a figure of 332k.

On the stock front, Apple Computer, Advanced Micro Devices, Genzyme Corp and Southwest Airlines all reported better than expected profits and rose 6%, 3%, 6% and 4%. GM was upgraded by Lehman and gained 3%. Delta Airlines increased fares and jumped 15%. Google had its price target raised to $350 by Lehman Bros. and added 2%. JDS Uniphase reiterated its forecast and moved higher by 5%.

On the negative side, Fairchild Semiconductor and Marriott came up short on earnings and gave up 1% and 3%. Prudential was downgraded by CS First Boston and lost 3%. Spanish Broadcasting System sank 9% after a downgrade by Banc of America. Yum Brands lost 3%. The stock beat earnings estimates, but guided lower.

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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