The recent SPX break below 1599 was probably a result of stop orders in futures and in the SPY ETF, which then has snowballed further. I had considered such a break to be at least a 50-50 possibility, which is the primary reason I didn’t recommend a stop on our 300% long position, taken at 10:45 this morning at SPX 1604.29. Candidly, however, I did not anticipate that the break would take the market down as low as it has so far.
I don’t know how low this technical break – which also has seen the Dow Industrials hit the minus 350 point marker — will take the market, but I do not see huge potential for a massive additional decline. For that reason, and for the reason described in the following paragraph, I am still not going to recommend a protective sell stop, preferring to accept the downside risk and not give up the potential for a still-expected rally late in the session. Obviously though, any subscribers who want to select their own sell stop level are free to do so.
Regardless how the market ends the day today, the daily model will be bullish tomorrow – not overwhelmingly so, but by enough of a margin so that I’m comfortable recommending holding the long position overnight and into tomorrow.
Thanks for the opportunity to be of service, and I’ll email you again in about ten hours – or sooner if circumstances warrant.
Turov on Timing is Copyright © 2013 by Turov Investment Group Inc. All rights reserved. Turov on Timing is for personal use only. All caveats and advisories that appear in the monthly Turov on Timing apply equally to this email. Re-publication and distribution is strictly prohibited. No part may be reproduced without the permission of the Turov Investment Group Inc. All recommendations are based on the Standard & Poor’s cash index (SPX) which cannot be directly traded and Turov Investment Group Inc. makes no recommendation or suggestion to readers as to how SPX-based recommendations should be traded but rather leaves that to the discretion of each individual reader. The “official” price of the opening and closing SPX is as reported at www.bigcharts.com and may not be consistent with futures or ETF prices. All stop recommendations are based on that “official” price. Any recommendation that is to take place at a specific time is basis the “opening” on a one minute bar chart beginning at that time and ending one minute later. All times mentioned are Eastern. Questions related to this service should be directed to InvestmentAdvice@aol.com.