Todd Market Forecast: A Few Days of Upside Next

Posted by Stephen Todd - Todd Market Forecast

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3:00pm Pacific Thursday May 18, 2017

DOW + 56 on 50 net advances

NASDAQ COMP + 44 on 400 net advances



STOCKS: The market stabilized today after yesterday’s hissy fit and our best estimate is that we have seen a trading bottom.

That’s the way the market frequently acts. It gets overbought, investors buy every little dip and it won’t go down. Then finally a catalyst or some sort of unexpected news development takes it down hard and then it’s already oversold.

GOLD: Gold was down $5. Profit taking with a little help from a rebounding dollar.

CHART The S&P 500 is just bouncing off an oversold 5 Day RSI (arrow). When this happens we normally have a few days on the upside.

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BOTTOM LINE:  (Trading)

Our intermediate term system is on a buy.

System 7 We are long the SSO from 86.27. Let’s put a stop in at 84.27 and remain long through Friday.

System 8 We are in cash. Stay there.

System 9 We are in cash. Stay there.

NEWS AND FUNDAMENTALS: Jobless claims were 232,000, less than the expected 240,000. The Philadelphia Fed Business Outlook Survey came in at 38.8, better than the expected 19.6. There are no important releases on Friday.

INTERESTING STUFF Wise men speak because they have something to say; Fools because they have to say something.— Plato

TORONTO EXCHANGE: Toronto stabilized, gaining 4.    

BONDS: Bonds were flat.

THE REST: The dollar had a decent rebound. Crude oil managed a small rise.

Bonds –Bullish as of May 12.

U.S. Dollar -Bearish as of May 4.

Euro — Bullish as of May 4.

Gold —-Bullish as of May 12.

Silver—- Bullish as of May 12.

Crude oil —- Bullish as of May 5.

Toronto Stock Exchange—- Bullish from January 22, 2016

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

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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 ( .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.