Todd Market Forecast for 3:00 Pacific Wednesday November 1, 2017
DOW + 58 on 131 net advances
NASDAQ COMP – 11 on 791 net declines
SHORT TERM TREND Bullish
INTERMEDIATE TERM Bullish
STOCKS: Several factors seemed to be at work on Wednesday. One factor was strength in the overseas markets. Japan was up 408 points and Germany was ahead by 235 points. The latter is equivalent to a Dow gain of over 400. I contacted a friend in Germany and asked why the great strength and he said it was a mystery. He did say that the market breadth wasn’t all that great.
Our market jumped in sympathy, but the gains were soon capped and breadth was rather poor here too.
Earnings continue to be a positive. 65% of S&P 500 companies have reported profits and 75% have beaten estimates. The 5 year average is 69%.
GOLD: Gold moved up $5. We’re going to change our outlook below.
CHART: The supply demand 5 day m.a. reported nightly is under .45. This tends to be a level from which upmoves occur. The fact that we haven’t even had a decline complicates the forecast somewhat, but we’ll call it bullish. (check your introductory material for further explanations.)
BOTTOM LINE: (Trading)
Our intermediate term system is on a buy.
System 7 We are in cash. Stay there for now.
System 8 We are in cash. Stay there for now.
System 9 We are in cash.
NEWS AND FUNDAMENTALS: The ADP employment figures showed 235,000 jobs added, above the estimated 210,000. The PMI Mfg Index came in at 54.6, above the expected 54.5. The ISM Mfg Index 58.7, lower than the expected 59.5. Construction spending rose 0.3%, above the anticipated flat reading. Oil Inventories dropped 2.4 million barrels. Last week the rose 900,000. On Thursday we get jobless claims.
INTERESTING STUFF: “Glory is fleeting, but obscurity is forever.”
—— Napoleon Bonaparte (1769-1821)
TORONTO EXCHANGE: Toronto gained 4.
BONDS: The bond market rose again.
THE REST: The dollar moved higher. Crude oil fell back slightly.
Bonds –Bullish as of October 27.
U.S. dollar – Bullish as of October 20.
Euro — Bullish as of October 10.
Gold —-Change to bullish as of November 1.
Silver—- Change to bullish as of November 1.
Crude oil —-Bullish as of October 10.
Toronto Stock Exchange—- Bullish as of September 20, 2017.
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.
