This is an 11:11 intraday update of Turov on Timing for Wednesday, August 31, 2011.
The SPX is advancing this morning after European banks were very strong in Europe, and the hope is that Germany will, in essence, stand strong in defense of its neighbors.
In the overnight message, I said I would email you again sometime during the trading session today, and my thought was to offer a recommendation for overnight into tomorrow.
As you probably know, the first day of the trading month (i.e., tomorrow) is historically the strongest day of the month. However…
I like to look at markets from many, many different perspectives. And the single case most similar to the current case was December 1, 2008. (History never repeats itself exactly, but that date is the most similar to tomorrow.)
The SPX was strong during the last three trading days of November 2008, up 5.58, up 30.29, and up 8.56. And on December 1, 2008, the SPX was down a whopping 80.03 points!
Similarly, the market (assuming it doesn’t do a massive turnaround in the next few hours) will end August with three solidly up sessions, up 33.28, up 2.84, and up whatever today brings. There are other similarities between December 1, 2008 and tomorrow, as well, but there are enough dissimilarities that I do not want to make a case for tomorrow being equivalent to December 1, 2008.
I wish there was more to go on, as one case does not have much (if any) statistical significance. Nevertheless, I find it hard to recommend going long in the face of the December 1, 2008 event, even if it is only one case. And going short on the historically strongest day of the month based on one case is also equally imprudent. So, somewhat reluctantly, my recommendation for tomorrow is to stand aside. I’ll confirm this overnight, but it won’t change.
Thanks for the opportunity to be of service, and I’ll email you again in a few hours.
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