Todd Market Forecast Stock Market Update for Wednesday (07/02/08)       
                     
      
www.toddmarketforecast.com

Available Mon- Friday after 6:00 p.m. Eastern, 3:00 Pacific. 
                 
DOW                              - 167 on 1450 net declines   

NASDAQ COMP.          - 54 on 1300 net declines      

SHORT TERM TREND                           Bearish

INTERMEDIATE TERM TREND          Bearish     

    Yesterday, General motors came to the rescue. Today it came to the
un rescue. Merrill Lynch downgraded the automaker which lost 14% and
closed at a 54 year low. In a measure of poetic justice, Oppenheimer
downgraded Merrill Lynch and that stock lost 3 1/2% and that stock is at
the bear market lows of 2003.    
    But the biggest culprit on Wednesday was again the oil market which
had another gonzo day. While this is going on, a sustained stock rally
is going to be problematic. Not even sharply positive guidance from
Deutsche Bank could hold back the bearish onslaught. 
    Today, the Dow entered official bear market territory, which is
meaningless, but of more import is the fact that that the New York
Composite and S&P 500 broke the March lows on a closing basis. Many
thought that the March low with the Bear Stearns debacle was the bottom
and it was for a while. 
     The chart shown to e-mail subscribers demonstrates that that crude
oil is more overbought than it has been in years, perhaps ever. Five
month RSI is a stratospheric 93. That means it's vulnerable, to a
setback, but we have to actually see it drop which is hasn't chosen to
do.        
       Gold moved up somewhat. Bonds had a solidly higher day and the
dollar lost a bit more.           

   NEWS AND FUNDAMENTALS:      
       
     The ADP report showed a loss of 79,000 jobs. Analysts were
expecting the figure to be 20,000. May Factory orders rose 0.6%, more
than the expected 0.5%. The figure for April was revised upward to 1.3%.
Oil inventories dropped 1.98 million barrels. Many were expecting a
rise. On Thursday we get ISM services and the dreaded non farm payrolls.
                                                  
     BOTTOM LINE: 

   Our intermediate term systems are on a sell signal. Mutual fund
investors are in cash.   

    Short term ETF traders are in cash. Stay there for now.       
  
 OTHER MARKETS

We are on a buy for bonds as of June 20.                       

We are on a buy for the dollar and a sell for the Euro as of June 13.   
       

We are on a buy for gold as of May 30.                 

We are on a buy for crude as of June 5.               

We are long term bullish for all major world markets, including those of
the U.S., Britain, Canada, Germany, France and Japan.  



STEPHEN TODD

A SHORT BIOGRAPHY

   Editor and publisher of the Todd Market Forecast, a monthly stock
market newsletter with an included nightly hotline. 

   Steve has published articles on the stock market in the following
publications: Barron's, Stock Market Magazine, Futures Magazine, The
National Educator, and others.

His stock market commentary is heard on the following stations: CNBC,
Bloomberg, CNNfn, Associated Press Radio, Business Radio Network, CKNW
in Vancouver, British Columbia, KFWB, Los Angeles and ROBTV in Toronto,
Ontario. 

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TODD MARKET FORECAST
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