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[TTHQ Staff]

Todd Market Forecast Stock Market Update for the close on Thursday 08/25/05
www.toddmarketforecast.com
Available Mon- Friday after 6:00 p.m. Eastern, 3:00 Pacific.

DOW + 17 on 570 net advances
NASDAQ COMP. + 5 on 200 net advances


STOCK MARKET ANALYSIS:


The stock market had a hardscrabble rally on Thursday, but given the fact that oil reversed an intraday decline to close positive gives it a bit of credit. We are probably not far, time wise from an uptrend lasting a few days.

Looking a bit further out, consider for a minute the background. The market rallied sharply into August, one of the weakest months, in fact, in S&P 500 terms, it is the weakest for the past 15 years. If we had entered August in an oversold condition, then perhaps we could have expected something better, but that wasn't the case. Now we have September looming, the worst month since 1950.

Our best bet is a choppy situation with a downside bias until we get into October. From there, an oversold market and seasonal strength should give us a very good uptrend well into January.

Of course, this is all complicated by the situation with crude oil. Essentially, we have two competing bull markets one of which interferes greatly with the other. Since the first of the year, oil has rallied 55%. Is it any wonder that the S&P 500 is basically flat during that period?


NEWS AND FUNDAMENTALS:

Initial claims dropped 4k to 315k which equaled the consensus. This was the sixth straight week that claims have been under 320k and bodes well for the non farm payrolls to be released next week. Chicago Fed President Michael Moskow stated that the Fed would continue to raise interest rates. Tomorrow, we get Greenspan's comments from Jackson Hole.

On the stock front, Coldwater Creek surged 17% on earnings. Mercury General added 5% on news that it would replace Hibernia in the S&P 400 Midcap. Six Flags put itself up for sale and gained 10%.

On the negative side, Dow Chemical lost 2% after a downgrade by Citigroup. Intuit sank 6% on a bigger than expected loss. Petsmart equaled estimates, but guided lower and dropped 14%. Patterson Companies came up short on earnings and gave back 6%. Tivo guided lower and dropped 15%.


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.

Short term traders in the SPY and QQQQ are back in cash. Remain there 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 on a buy signal for bonds as of August 23, 2005.

We are on a buy for the Euro and a sell for the dollar since August 3, 2005.

We are on a buy signal for gold as of August 3, 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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