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[TTHQ Staff]

Todd Market Forecast Stock Market Update for the close on Thursday 07/28/05
www.toddmarketforecast.com

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

DOW + 68 on 1500 net advances

NASDAQ COMP. + 12 on 800 net advances

STOCK MARKET ANALYSIS:

We keep thinking that the stock market will have a short term correction, giving us an opportunity to add to long positions and it just doesn't happen. It's doesn't blow the lid off, but the market just keeps clawing its way higher. We are reminded of the old saying, "in a bull market, the surprises come on the upside".

The key, in our opinion, remains liquidity. There is just a lot of money in the system and some it is finding its way into the stock market. You can see what liquidity can do by looking back in time.

In late 1999, there was a lot of anxiety about Y2K. All kinds of bad things were supposed to happen at the millennium change. This caused the Federal Reserve to flood the system with money. The Nasdaq Composite responded by rallying from 2966 on October 29, to over 5,000 by March 10. This was a 69% move in less than 4 1/2 months. Liquidity is the number one indicator for the stock market. If there is a lot of money around, it will be hard for stocks to retreat substantially.

On Thursday, the trigger was earnings. Again, they came in better than expected which is getting to be a habit. The non confirmations that we mentioned yesterday have been taken out and the major indices are once again at four year highs. The smaller and mid cap indices are again at all time highs. We could have a sharp pullback at any time, but the main trend remains up.

NEWS AND FUNDAMENTALS:

There were very few economic releases on Thursday, but we make up for it on Friday when we get second quarter GDP, July Michigan Sentiment and July Chicago PMI. Initial claims were 310k, less than the expected reading of 320k.

On the stock front, Aetna, Alberto-Culver, Beazer Homes, Coca Cola Enterprises and Ethan Allen beat estimates and rose 5%, 7%, 5% and 3%. The same was true for Hanover Compressor, Harris Corp, MGM Mirage and Teledyne. These stocks gained 10%, 11%, 6% and 8%. Honeywell was upgraded by Merrill Lynch and added 2%.

On the negative side, Amkor Technology equaled the anticipated loss and gave crashed 18%. Computer Associates LSI Logic beat estimates, but still lost 7%, 4%. Jones Apparel and Waste Management missed earnings and sank 4% and 6%.




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 sell signal for bonds since July 21, 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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