An important letter written by Stephen Todd, who was Ranked #1 in 2017 by the venerable Timer’s Digest with a 31.6% return for 2017. In this evenings letter, Stephen makes a case for a rally in stocks tomorrow. Perhaps more importantly, as of today Feb 20th Stephen changes to Bullish the US Dollar & Bearish Gold, Silver & the Euro – Robert Zurrer for Money Talks

For Tuesday February 20, 2018

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

DOW – 254 on 976 net declines

NASDAQ COMP – 5 on 963 net declines

SHORT TERM TREND Bullish

INTERMEDIATE TERM Bullish

Editor’s note.— For those of you who missed the interview on Saturday with Michael Campbell, you can hear it by clicking on THIS LINK

STOCKS: A 10% drop for Walmart, its worst loss in 30 years, took 73 points off the Dow and caused selling in other retailers like Target. The struggle for online sales sent a shudder through the markets.

It is our belief that this was a pullback within an uptrend albeit a somewhat scary one. I liked the fact that the NASDAQ and high tech indices were not down nearly as much. Check out the chart.

GOLD: Gold was down a whopping $25. The Wall Street Journal blamed a rising dollar and rising interest rates. I’m not so sure, but I don’t have an alternate theory. I’ll keep checking.

CHART: The SOX or semiconductor index was up nicely on Tuesday in spite of the drop by the S&P 500 and Dow (right arrow). The SOX frequently leads the broader averages so a rebound tomorrow would not be a big surprise. The other arrows show previous occurrences.  

BOTTOM LINE:  (Trading)

Our intermediate term system is on a buy.

System 7 We are long the SSO from 107.03. Keep your stop at 110.03.

System 9 We are on a buy from Friday Feb. 2.

www.toddmarketforecast.com

NEWS AND FUNDAMENTALS: There was nothing of importance on Tuesday. On Wednesday we get the PMI Composite Flash, existing home sales and the FOMC minutes from the last meeting.

INTERESTING STUFF: Any man can make mistakes, but only an idiot persists in his error. ——-Marcus Tullius Cicero

TORONTO EXCHANGE: Toronto lost 13.

BONDS: Bonds were down somewhat.

THE REST: The dollar rebounded from a support zone. Crude oil was flat, giving up intraday gains.

Bonds –Bearish as of Jan. 9.

U.S. dollar – Change to bullish as of Feb.20.

Euro — Change to bearish as of Feb. 20.

Gold —-Change to bearish as of Feb. 20.

Silver—- Change to bearish as of Feb. 20.

Crude oil —-Bullish as of Feb. 14.

Toronto Stock Exchange—-Bullish as of Feb. 12.

We are on a long term buy signal for the markets of the U.S., Canada, Britain, Germany and France.

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.