Todd Market Forecast: Looking For Wednesday Turnaround

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Posted by Stephen Todd - Todd Market Forecast

on Tuesday, 29 May 2018 19:48

 After an exceptional 2017 showing a 31% return, in 2018 Stephen Todd remarkably missed the big Stock decline in January and currently has a positve return on the year with 3 profitable out of 5 trades - R. Zurrer for Money Talks

For Tuesday May 29, 2018 - 3:00 PST

DOW - 392 on 507 net declines

NASDAQ COMP - 37 on 732 net declines



STOCKS: On Friday, I predicted that the next couple of days should be up unless some sort of geopolitical event comes out of left field. Well, that's exactly what happened. There was a political crisis in Italy and this spread fear of multiple exits from the euro currency. 

And if that weren't enough. the prospect of a China, U.S. trade conflict raised its ugly head again. 

Then there were interest rates which dropped sharply. Lower rates hurt the banks. Hey wait. Weren't we concerned about rates being too high a few weeks ago? That's why we have to look at the charts. They tend to summarize the diverse inputs.

GOLD: Gold was up $2 You would think that with all the uncertainty, and a big drop in interest rates, that gold would have done better. Of course, the dollar kept surging and that kept a lid on the yellow metal. 

CHART: Just looking at the chart without the indicator, it looks negative. we've seen some support lines broken. However, we are not oversold as measured by 5 day RSI (arrow). An oversold RSI has a pretty good record for predicting rebounds.

Screenshot 2018-05-29 18.38.01

BOTTOM LINE: (Trading)


Our intermediate term system is on a buy.

System 7 We are long the SSO from 112.24. We should turn it around on Wednesday, but if the S&P 500 is lower with 5 minutes left in the session, sell at the close. 

System 9 Neutral. 

System 10 - Gold We are in cash. Stay there for now. 

NEWS AND FUNDAMENTALS: Durable goods orders lost 1.7%, worse than the expected loss of 1.2%. Consumer sentiment was 98, lower than last month's 98.8. On Tuesday we get the Case Shiller home price index and consumer confidence. 

INTERESTING STUFF Justice will not come to Athens until those who are not injured are as indignant as those who are injured. -----Thucydides

TORONTO EXCHANGE:Toronto lost 94. 

BONDS: Bonds had another sharp rise. 

THE REST: The dollar surged to another new high. Crude oil got hit yet again. Crude is quite oversold.

Bonds --Bullish as of May 21. 

U.S. dollar - Bullish as of May 15.

Euro --- Bearish as of May 15.

Gold ----Bullish as of May 24.

Silver---- Bullish as of May 10.

Crude oil ----Bearish as of May 24.

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.

Screenshot 2018-05-29 19.05.17

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. 12.0 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.


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