“Our intermediate term systems are on a buy signal”
Todd Market Forecast for Monday June 3, 2013
Available Mon- Friday after 6:00 P.M. Eastern, 3:00 Pacific.
DOW + 138 on 450 net declines
NASDAQ COMP + 9 on 250 net advances
SHORT TERM TREND Bearish
INTERMEDIATE TERM TREND Bullish
Editor’s note. We E mailed the June newsletter earlier today. If you did not receive it, let us know.
STOCKS: The reason given for the buying on Monday was a weak manufacturing number. This, it is opined, will keep the Fed printing money. I have always believed that this is so wrong. The market would rather have a weak economy than a strong one because it keeps the Fed easy.
Actually, I think it rallied because of the very short term oversold condition which was the reason for our System 2 buy signal, but it was a poor quality uptrend because there were more declining issues than advancing ones.
GOLD: Gold had a good day. Up over $18. We’re still positive on this market, but the rally off the lows has been a bit labored.
CHART: We were non stop bullish for months because breadth was out performing the popular averages. That is no longer the case. The advance decline was negative today in spite of a rally by most indices. That shows that most stocks are not participating. We also like the fact that no one is talking about this internal weakness.
TORONTO EXCHANGE: Toronto was down another 41.
S&P\TSX Venture Comp: The Venture Comp was higher by 7.
BONDS: Bonds had a modest rebound.
THE REST: The dollar dropped. Silver, copper and crude oil had decent bounces.
BOTTOM LINE:
Our intermediate term systems are on a buy signal.
System 2 traders We bought the E-mini S&P 500 at 1633.00. We Bought the SSO at 79.63. Sell at the close on Tuesday.
System 7 traders We are in cash. Stay there on Tuesday.
Stock investors We are long Intel from 21.61 Let’s move the stop to 22.50.
NEWS AND FUNDAMENTALS:
The ISM Mfg. Index came in at 49.0, less than the expected 51.0. Any reading less than 50.0 indicates a contraction in manufacturing. Construction spending rose 0.4%. The expectation was for a rise of 1.0%. On Tuesday we get the trade deficit.
We’re on a sell for bonds as of May 10.
We’re on a sell for the dollar and a buy for the euro as of May 20.
We’re on a buy for gold as of May 20.
We’re on a sell for silver as of May 15.
We’re on a sell for crude oil as of May 29.
We’re on a buy for copper as of May 3.
We’re on a buy for the Toronto Stock exchange TSX as of April 24.
We are on a sell for the S&P\TSX Venture Comp. as of Jan. 29.
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 ( Below .80 is a negative. Above 1.00 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).
No guarantees are made. Traders can and do lose money. The publisher may take positions in recommended securities.
