Todd Market Forecast for Wednesday February 24, 2016

Posted by Stephen Todd - Todd Market Forecast

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DOW                                                 + 53 on 550 net advances
 
NASDAQ COMP                                  + 39 on 550 net advances
 
SHORT TERM TREND                         Bullish  
 
INTERMEDIATE TERM TREND            Bearish
 
  STOCKS: Another crazy day. The Dow was down as much as 266 points in sympathy with oil. When crude reversed, so did the stock market. See the chart below.
       It’s very unusual for the stock market to be captive to another market. I would have thought that this slavish lockstep would have ended by now, but it hasn’t.
       Oil sank because some OPEC officials were back tracking on the production limits, but rose after crude oil inventories showed another increase, but gasoline stocks declined.
       Regarding trading, check out the “Interesting Stuff” section below.
        
   GOLD:  Gold was up $8. It was much higher intraday. The stock market reversal caused gold to reverse
 
 CHART: The USO is a crude oil ETF. You can see the relationship between it and the stock market in this intraday chart.
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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. Stay with it on Thursday.                   
   System 8   We are in cash. Stay there.
GOLD  We are in cash. Stay there.     
 
News and fundamentals: New home sales came in at 494,000, less than the expected 540,000. On Thursday we get jobless claims and durable goods orders.     
Interesting Stuff  Trading this market is tough. I’m sure many of you would not have been able to hang on today. If trading were easy, we would all be rich. With a market this wild, you need to trade lightly enough to hold on to positions through intraday selloffs.
TORONTO EXCHAN GE:   Toronto dropped 23.
S&P/TSX VENTURE COMP: The TSX was up 1.           
BONDS:  Bonds were flat to down.                                                                                                                                             
THE REST:  The dollar rose slightly. Silver was flat to down. Crude oil managed a small rise.                                                                                                
 
Bonds –Bearish from Feb. 12.                           
 
U.S. dollar – Bullish as of Feb. 16.                              
 
Euro — Bearish as of Feb. 19.  
 
Gold —-Bearish as of February 22.                                
 
Silver—- Bearish as of February 22.                            
 
Crude oil —- Bearish from January 5.                               
 
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.  
Wed. Thu. Fri. Mon. Tue. Wed. Evaluation
Monetary conditions 0 0 0 0 0 0 0
5 day RSI S&P 500 72 66 66 76 57 62 0
5 day RSI NASDAQ 74 63 65 73 56 63  0
McCl-
lAN OSC.
+191 +174 +154 +226 +148 +168
 
Composite Gauge 5 12 10 4 16 9 0
Comp. Gauge, 5 day m.a. 8.4 8.0 7.2 7.0 9.4 10.2 0
CBOE Put Call Ratio 1.14 1.07 1.03 .95 1.12 1.04
+
 
VIX 22.31 21.65 20.53 19.38 20.28 20.72 0
VIX % change -7 -3 -1 -6 +8 -1 0
VIX % change 5 day m.a. -3.2 -4.0 -5.2 -4.4 -1.8 -0.6 0
Adv – Dec 3 day m.a. +1882 +1301 +624 +502 +143 +380  0
Supply Demand 5 day m.a. .69 .71 .80 .79 .61 .62 0
Trading Index (TRIN) .58 1.51 1.76 .37 1.96 1.06
 0
 
S&P 500
 
1927 1918 1918 1946 1921 1930 Plurality 0
 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.