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[TTHQ Staff]

Todd Market Forecast Stock Market Update for Thursday 10/04/07
www.toddmarketforecast.com
Available Mon- Friday after 6:00 p.m. Eastern, 3:00 Pacific.

DOW + 6 on 700 net advances
NASDAQ COMP. + 4 on 350 net advances

SHORT TERM TREND Bearish
INTERMEDIATE TERM TREND Bullish



Market Commentary

We saw some things today that we didn’t like from strictly a short term basis. We continue be quite bullish on the intermediate to longer term. First, the CBOE put call ratio was a lowly .71. There have only been 11 times that the ratio has been below .90 since mid July and in 7 cases the S&P was down the next day. It has been in the low 70s only once during that time and the next session was down 27 S& P points.

The Composite Gauge 5 day m.a. is back to 7.8. This is an overbought reading. Finally, the three day m.a. of advances minus declines turned down from a reading of + 784. When this indictor moves over + 500 and then turns down, there has been an historical tendency for the market to pull back a bit.

The whole thing is complicated by the jobs number to be released at 8:30 Eastern on Friday morning. The expectation is for a job creation of between 100,000 and 115,000 new jobs. If it’s in this range the stock market will have tendency to rally. Extreme readings that are far under or far over will most likely cause some selling. Too many jobs will cause inflation according to the flawed thinking of economists and too few will cause renewed discussion of the “R” word, recession. Of all economic releases, this is the most watched.

We think any setback will create a buying opportunity since we believe that the path of least resistance is higher.

Gold sold off early on dollar strength, but as the dollar fell back, gold managed a rally. Bonds rallied and still look pretty good to us.



NEWS AND FUNDAMENTALS:

Initial claims came in at 317,000 more than the expected 310,000. Factory orders dropped 3.3%. The expectation was for a drop of 2.8%. On Friday, in addition to the job creation numbers, we get the average hourly rate.



BOTTOM LINE:

Our intermediate term systems are on a buy signal. Mutual fund investors are in 100% invested position. ETF investors are long the S&P 500 ETF, symbol SPY from 153.32.

Short term ETF traders are in cash.



OTHER MARKETS

We are on a buy for bonds as of September 27.

We are on a sell for the dollar and a buy for the Euro as of September 11.

We are on a buy for gold as of September 18.

We are on a buy for crude oil as of September 27.

We are long term 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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