Stephen Todd made a significant amount of money in the huge January rally, got out before this February crash, then got back in on Monday February 12th and after a 747 Dow point rally in two days is up nearly 8% for February too. Ranked #1 in 2017 by Timer’s Digest with a 31.6% return in 2017 Steven gives his view on what he expects going forward in this letter – Robert Zurrer for Money Talks

For Monday Feb 26, 2018

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

DOW + 399 on 948 net advances

NASDAQ COMP + 84 on 888 net advances

SHORT TERM TREND Bullish

INTERMEDIATE TERM Bullish

STOCKS: A heads up. Tomorrow, new Fed head Jerome Powell is testifying before Congress and there is always the specter of market moving comments.

When the market is up 747 points in two days, there is usually a cliche to accompany it. How about this? “In a bull market, surprises come on the upside”.

There wasn’t much specific news to account for it. For some, the earnings picture continues to be a factor. And indeed, a record 78% of firms have beaten fourth quarter revenue estimates.

GOLD: Gold was up $5. Not a lot of specifics to account for it, but it wasn’t much of a move.

CHART: Five week RSI got very close to an oversold condition. Usually, when it gets this low, the rebound usually lasts much longer than the two weeks that this rebound has lasted. In my view, we are still owed more on the upside, but I wouldn’t be surprised by some near term profit taking.

BOTTOM LINE:  (Trading)

Our intermediate term system is on a buy.

System 7 We are long the SSO from 107.03. Move your stop to 115.03.

System 9 We are currently neutral.

NEWS AND FUNDAMENTALS: New home sales came in at 593,000, less than the expected 640,000. On Tuesday we get durable goods, the trade deficit, the Case Shiller Home Price Index and consumer confidence  

INTERESTING STUFF: I heard an interesting comment today. A market watcher noted that the recent correction would have once taken six weeks, but now was over in a couple. He likened it to an overall speeding up of society. It once took days to get photos back. Now they’re posted faster than you can blink your eyes. I think that there is something to that. 

TORONTO EXCHANGE: Toronto rose 76.

BONDS: Bonds fell back, but I believe that it’s trying to make a bottom.

THE REST: The dollar was quiet again. Crude oil continues to rally.

Bonds –Bearish as of Jan. 9.

U.S. dollar – Bullish as of Feb.20.

Euro — Bearish as of Feb. 20.

Gold —-Bearish as of Feb. 20.

Silver-— 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.