Todd Market Forecast

Posted by Stephen Todd - Todd Market Forecast

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For Tuesday March 15, 2016  3:00 Pacific.  
                 
DOW                                                 +22 on 1500 net declines
 
NASDAQ  COMP                                – 22 on 1400 net declines
 
SHORT TERM TREND                         Bearish (change)  
 
INTERMEDIATE TERM TREND            Bearish
 
STOCKS: The market underpinnings, after being healthy for weeks are now weakening. I’m not sure if I have ever seen a higher Dow with 1500 net declines. We’ll have more on this in the chart section below. 
Retail sales were in line with expectations, but the prior month was revised sharply lower. This suggested a weaker economy. 
Tomorrow is the FOMC day and it frequently gets wild. No one expects them to actually raise rates, but the tone of their comments will be important.  
              
GOLD:  Gold was down $12. There is concern that the Fed will take on a bearish tone.  
 
CHART: Market breadth was atrocious on Monday. The S&P 500 is still making a rising bottoms pattern, but the advance decline line made a low below a previous low (arrows). This moved us to become defensive on the near term.
 
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BOTTOM LINE:  (Trading)
Our intermediate term system is on a sell as of February 9.
   System 7  We are long the SSO from 56.94. Sell at the opening on Wednesday. I want to protect our profit and avoid the wild swings associated with FOMC day.                     
   System 8   We are in cash. Stay there.
GOLD  We are in cash. Stay there.     
 
News and fundamentals: Retail sales for February dropped 0.1% which was in line with expectations. However, the January figures were revised down from plus 0.2% to minus 0.4%. The PPI-FD was minus 0.2%, in line with expectations. The Housing Market Index came in at 58, less than the anticipated 59. The Empire State Mfg Survey was .62, better than the consensus minus 11.25.  On Wednesday we get the CPI, housing starts, industrial production and the FOMC announcement.
 
Interesting Stuff: Our greatest weakness lies in giving up. The most certain way to success is to try just one more time. —- Thomas Edison
 
TORONTO EXCHAN GE:   Toronto lost 77.
S&P/TSX VENTURE COMP: The TSX was down 3.           
BONDS:  Bonds were flat.                                                                                                                                                      
THE REST:  The dollar pulled back slightly. Silver and crude oil were lower again.                                                                                                           
 
Bonds –Bearish from Feb. 12.                           
 
U.S. dollar – Bearish as of March 7.                              
 
Euro — Bullish as of March 7  
 
Gold —-Bearish as of March 14.                                  
 
Silver—- Bearish as of February 22.                            
 
Crude oil —- Bearish as of March 14.                               
 
Toronto Stock Exchange—- Bullish from January 22.    
 
S&P\ TSX Venture Fund — Bullish from January 29.       
 
We are on a long term buy signal for the markets of the U.S., Canada, Britain, Germany and France.  
Tue. Wed. Thu. Fri. Mon. Tue. Evaluation
Monetary conditions 0 0 0 0 0 0 0
5 day RSI S&P 500 55 62 62 78 75 70
5 day RSI NASDAQ 50 58 53 73 73 63  0
McCl-
lAN OSC.
+176 +202 +138 +205 +143 +40
0
 
Composite Gauge 15 8 11 5 10 10 0
Comp. Gauge, 5 day m.a. 7.6 8.2 9.6 9.2 9.8 8.8 0
CBOE Put Call Ratio .98 .93 .99 1.01 .92 89
0
 
VIX 18.67 18.34 18.05 16.50 16.92 16.84 0
VIX % change +8 -2 -2 -9 +3 0 0
VIX % change 5 day m.a. +1.4 +1.6 +1.6 -0.4 -.04 -2.0 0
Adv – Dec 3 day m.a. +111 +176 +353 +776 -262 -30  0
Supply Demand 5 day m.a. .68 .63 .54 .62 .60 .78 0
Trading Index (TRIN) 1.83 1.09 .67 .72 1.31 1.04
 0
 
S&P 500
 
1979 1989 1990 2022 2020 2016 Plurality -1
 INDICATOR PARAMETERS
     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 ( .80 or below is a negative. 1.00 or above 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). Trading Index (TRIN) 1.40 or above bullish. No level for bearish.
      No guarantees are made. Traders can and do lose money. The publisher may take positions in recommended securities.