Todd Market Forecast Stock Market Update (03/12/08)
www.toddmarketforecast.com
Available Mon- Friday after 6:00 p.m. Eastern, 3:00 Pacific.
DOW - 47 on 900 net declines
NASDAQ COMP. - 12 on 200 net declines
SHORT TERM TREND Bullish
INTERMEDIATE TERM TREND Bearish
Today was somewhat disappointing as a follow through to yesterday, but oil rose still again and the dollar sank to another new low. That seemed to sour the mood. Oil was especially problematic. The oil inventories rose over 3 ½ times the expected amount and this spurred the Dow to an intraday gain of 160 points, but as soon as oil began to rally again, the stock market died.
On top of that the ECB made some hawkish comments on interest rates and both Goldman Sachs and Citigroup said that the Fed’s plan announced yesterday may not succeed. Finally, the CEO of Freddie Mac said that the housing market was the worst in 100 years. Amazing. I wonder how much he really knows about 1908 real estate.
When you think about it, the market did pretty well considering the negative news background. What it needs is a follow through to the big push yesterday to give the rally some staying power. As the chart we show to E-mail subscribers demonstrates, the market surged from an oversold condition, but still needs to break the pattern of lower lows and lower highs. The odds favor that this will happen, but let’s see.
Gold had a solid, if not spectacular day and Bonds had a solid session, making a new rally high.
NEWS AND FUNDAMENTALS:
Oil inventories rose 6.18 million barrels. The expectation was for a rise of 1.68 million. On Thursday we get retail sales and that can be a market mover.
BOTTOM LINE:
Our intermediate term systems are on a sell signal. Mutual fund investors are in cash.
Short term ETF traders bought the S&P 500 ETF, symbol SPY at 132.73. Keep your stop at 127.50.
OTHER MARKETS
We are on a buy for bonds as of February 21.
We are on a sell for the dollar and a buy for the Euro as of February 27.
We are on a buy for gold as of March 5.
We are on a buy for crude as of March 5.
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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