Todd Market Forecast: Oversold

Posted by Stephen Todd - Todd Market Forecast

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Todd Market Forecast for Thursday March 23 , 2017

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

DOW – 4 on 900 net advances

NASDAQ COMP – 4 on750 net advances



STOCKS: The market was captivated by the health care debate on Thursday. When it looked like the bill would pass the Dow was up over 80, but when contrary news hit the tape, we saw selling.

The market is oversold by a number of measures and seems to want to go up, but the health care situation is an artificial overlay suppressing prices. This should resolve fairly soon.

GOLD: Gold gave back $4. We’ve had a good run. Looks to be minor profit taking.

CHART The Dow and other popular averages have been in a downtrend, but it’s not being confirmed by breadth. When there is a conflict, breadth usually (but not always) wins.

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BOTTOM LINE:  (Trading)

Our intermediate term system is on a buy.

System 7 We are in cash. Buy at the close on Friday. System 9 is a rigid system, but we want to remain long since the market is oversold and breadth is constructive. Given the news, we are being a bit aggressive here.

System 8 We are in cash. Stay there.

System 9 We are long the SSO from 85.30. This is a two week system. Sell at the close on Friday.

NEWS AND FUNDAMENTALS: Jobless claims were 258,000, worse than the expected 240,000. New home sales were 592,000 more than the anticipated 565,000. On Friday we get the PMI composite flash and durable goods orders.

INTERESTING STUFF: It’s not what you look at that matters, it’s what you see. ———–Henry David Thoreau

TORONTO EXCHANGE: Toronto gained 35.

BONDS: Bonds were flat.

THE REST: The dollar was up slightly. Silver was mildly higher. Crude oil backed off. Crude oil moved down below $48 .

Bonds –Bullish as of March 15.

U.S. dollar -Bearish as of March 15.

Euro — Bullish as of March 15.

Gold —-Bullish as of March 15.

Silver—- Bullish as of March 15.

Crude oil —- Bearish as of Nov. 29.

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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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.