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[TTHQ Staff]

Todd Market Forecast Stock Market Update Wednesday 08/08/07
www.toddmarketforecast.com
Available Mon- Friday after 6:00 p.m. Eastern, 3:00 Pacific.

DOW + 154 on 1400 net advances
NASDAQ COMP. + 51 on 1150 net advances

SHORT TERM TREND Bullish
INTERMEDIATE TERM TREND Bullish


Market Commentary

Cisco Systems had gonzo earnings and guided higher. Then CEO John Chambers stated that the world economy was the best he had ever seen. This turned on the enthusiasm and short covering and the Dow was up 191 points with 90 minutes to go.

Then someone started a rumor that Goldman Sachs, one of the debt troubled firms, was going to have a news conference. That made bidders pull back and 60 minutes later the Dow was actually down 20 points for the session. Finally, the rumor was denied and the buyers came back in the last 30 minutes. This just goes to show that the markets are still jittery.

On January 30, we mentioned that the number of issues making new yearly lows had reached 800 and we said that, in the past, a figure this high usually occurred near a major low. Well, the S&P 500 moved even lower over the next few days, but the new low indicator contracted to 650. This meant that most issues had stopped going down and we stated that we were near a bottom. The chart shown to e-mail subscribers shows the contraction of new lows as the S&P retreated still further.

Chances are good for at least a partial retest, but our best estimate is that the stock market will now have an upward bias into the September, October time frame when seasonal considerations may again cause some short term trouble.

Gold managed a decent gain and appears to have resumed its uptrend. Bonds got bombed. It seems that China threatened to sell bonds if Congress goes ahead with a trade restrictions bill. Yet, if you ask economists about trade deficits, they’ll tell you straight from their ivory tower that it’s not a problem. Yeah right.

I wish I could remember who said that economics is the only field where one can be constantly wrong yet still be considered an “expert”.



NEWS AND FUNDAMENTALS:

Wholesale inventories rose 0.5% which is more than the expected 0.4%. On Thursday we get initial claims. This is a light week for news.



BOTTOM LINE:

Our S&P and NASDAQ intermediate term systems remain on a buy signal. Mutual fund investors should be in a 100% invested position in the fund of their choice.

ETF traders are in cash. Let’s stay there for now. We need a pullback.



OTHER MARKETS

We are on a buy signal for bonds as of June 15.

We are on a buy for the dollar and a sell for the Euro as of July 27.

We are on a buy for gold as of July 30.

We are on a sell for crude oil as of August 6.

We are bullish for all major world markets, including those of the U.S., Britain, Canada, Germany, France and Japan.



STEPHEN TODD : A SHORT BIOGRAPHY

Editor and publisher of the Todd Market Forecast, a monthly stock market newsletter with an included nightly hotline.

Steve has published articles on the 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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