The Todd Market Forecast -The Bottom Line

Posted by Stephen Todd: The Todd Market Forecast

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DOW                                            -179 on 1450 net declines

NASDAQ COMP                               – 61 on 1050 net declines

SHORT TERM TREND                       Bullish

INTERMEDIATE TERM TREND           Bearish (change)

Available Mon- Friday after 6:00 P.M. Eastern, 3:00 Pacific.

STOCKS: We’re bearish on the stock market for 2014. This was the title of our January newsletter, sent out on January 6th.

But, we thought we could get a bit more on the upside, mainly based on the fact that the advance decline line was outperforming the major averages and also on the favorable seasonality.

So it was a big surprise to see the extreme weakness on Monday. Several things probably contributed. Goldman Sachs said that valuations were elevated. Dennis Lockhart the president of the Atlanta Fed suggested that tapering would continue and there have been a number of earnings warnings.

GOLD:  Gold was up $6.

CHART: The S&P 500 made a low below a previous low today (arrows). That tends to be a negative. However, the VIX, or fear index changed by 9%. When it changes by this much, we usually get a short term bounce. Let’s see what happens tomorrow.


TORONTO EXCHANGE:    Toronto was down 60.                            

S&P\TSX Venture Comp: The Venture Comp was down 2.                                                                

BONDS: Bonds moved higher again.                                                                                                                                

THE REST: The dollar was lower. Silver rallied. Copper and crude oil were lower.                                                                           


Our intermediate term systems are on a buy signal.  

System 7  We bought the SSO at 101.79. If there are more declining issues than advancing ones at 3:45 EST, sell at the close.                  

System 8   We are in cash. Stay there on Tuesday.      


There were no important economic releases Monday. On Tuesday we get retail sale. That should be interesting.


We’re on a buy for bonds as of  January 10.                     

We’re on a buy on the dollar and a sell for the euro as of December 19.                               

We’re on a sell for gold as of December 19.       

We’re on a buy for silver as of December 10.             

We’re on a sell signal for crude oil as of  January 2.               

We’re on a sell for copper as of  January 9.                   

We’re on a buy for the Toronto Stock Exchange as of  today December 26.           

We’re on a buy for the S&P\TSX Venture Comp. as of December 31.   

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

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 Monetary conditions (+2 means the Fed is actively dropping rates; +1 means a bias toward easing. 0 means neutral, -1 means a bias toward tightening, -2 means actively raising rates). RSI (30 or below is oversold, 80 or above is overbought). McClellan Oscillator ( minus 100 is oversold. Plus 100 is overbought). Composite Gauge (5 or below is negative, 13 or above is positive). Composite Gauge five day m.a. (8.0 or below is overbought. 13.0 or above is oversold). CBOE Put Call Ratio ( Below .80 is a negative. Above 1.00 is a positive). Volatility Index, VIX (low teens bearish, high twenties bullish), VIX % single day change. + 5 or greater bullish. -5 or less, bearish. VIX % change 5 day m.a. +3.0 or above bullish, -3.0 or below, bearish. Advances minus declines three day m.a.( +500 is bearish. – 500 is bullish). Supply Demand 5 day m.a. (.45 or below is a positive. .80 or above is a negative).

No guarantees are made. Traders can and do lose money. The publisher may take positions in recommended securities.

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Todd Market Forcast | P.O. Box 4131 | Crestline, CA | CA | 92325