NASDAQ COMP                                – 14 on 750 net declines

 

SHORT TERM TREND                        Bearish (change)

 

INTERMEDIATE TERM TREND            Bullish

 

STOCKS :  The reason given for the decline on Wednesday was a profit warning from Wal-Mart. I thought this was a bit weird. The company said that this was because of a pay raise to employees, not a decline in sales.

But don’t argue with the market, even if it’s wrong. The market looked like it was turning up, then the Wal-Mart announcement killed the incipient rally about an hour after trading began.         

       

GOLD:  Gold was up $23. A nice decline in the dollar got the credit.      

 

CHART:  I was surprised to see the averages ignore the fact that the Trading Index had two days in a row above 1.50. This normally results in a bounce. Perhaps on Thursday.

 

 

BOTTOM LINE:  (Trading)

Our intermediate term system is on a buy as of August 26.

System 7   We sold the SSO at 60.04 for a loss of .13. Basically a break even. Stay in cash.       

System 8   We are in cash. Stay there.                    

GOLD  We are in cash. Stay there. News and fundamentals:  PPI final demand was down 0.5%, more than the expected drop of 0.2%. Retails sales rose 0.1%, in line with expectations. The Fed Beige Book was described as mildly negative.  On Thursday we get the CPI, jobless claims, the Empire State Mfg. Survey and the Philadelphia Fed Business Outlook Survey.

 

Interesting Stuff :  Economists tell us that deflation is bad. Then why did the U.S. become the premier economic power between 1865 and 1915, a period of deflation. Just another thing that they are wrong about.

 

TORONTO EXCHAN GE:   Toronto gained 17.                

S&P/TSX VENTURE COMP: The TSX was up 3.            

BONDS:  Bonds were sharply higher.                                                                                                    

THE REST:  The dollar was down sharply. Silver was up nicely. Crude oil was marginally lower.                                                

 

Bonds — Bullish since September 4.                           

 

U.S. dollar –Bearish since October 9.                            

 

Euro — Bullish since October 9.  

 

Gold —-Bullish since September 24.                              

 

Silver—- Bullish since October 2.                           

 

Crude oil —- Move to bearish as of today October 12.                               

 

Toronto Stock Exchange—- Bullish since August 27.    

 

S&P\ TSX Venture Fund — Bullish since August 27.    

 

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

 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.