This is Turov on Timing for Friday, August 3, 2012.
First, a small bookkeeping item: On Wednesday, the SPX closed at 1375.14, not 1375.32.
The SPX declined 10.14 points yesterday to close at 1365.00. TOT daily traders came into the session 300% long and were stopped out at SPX 1365. So far, the loss this week for TOT daily traders is greater than any week since the week of May 14-18, 2012. If it’s any consolation, during the following week then (May 21-25), our TOT daily traders record recuperated by slightly more than the loss of the prior week.
Since initiation of the Turov on Timing service on September 30, 1993, our daily trader recommendations have gained 13150.50 cumulative SPX points, compared to a gain of 906.07 points in the index itself over the same period. That’s a ratio of 14.51 to one.
The super long term perspective for the stock market remains bearish (as it has been since January 2000 after having been bullish from December 1974 until then). When the current cyclical bull market ends (and at present, my best educated guess is that it has not ended, but it will end later this year or early next), expect another nasty crash to perhaps finally bring an end to the long term bear market that began in 2000.
The Intermediate Term Model remains bullish. As I’ve been saying for awhile, I expect to see SPX 1400 before SPX 1300 (although long term, I expect to see SPX 1000 before SPX 2000).
There are two noteworthy observations for today:
1. While month-end seasonality is not as strong a market factor as it used to be, it is still significant. For the last two days of a month AND the first two days of the new month to ALL be down (as is the case now) is rare. The following is a table of the only three cases during the past decade:
Last 2 days of prior month and first day of this month
SPX did this on the following day
In midst of meltdown
Next week +55.38
Subsequent day -60.27 (& TOT was short)
2. Yesterday was only the fifth time ever that the SPX has declined for four consecutive days prior to a Friday jobs report. (A jobs report is scheduled for today.) Four of those five Fridays saw the market advance. The singular decline was on July 2, 2010 (see table above) and was modest. And as indicated, the following week saw the SPX advance by 55.38 points. Furthermore, that July 2 decline represented the low for the balance of the year.
As I’ve said many times in this space, significant news will always trump anyone’s model, and yesterday was no exception as Wall Street freaked over the Knight debacle and the Draghi non-event. Candidly, I was pleased (and once again, candidly, surprised) by the magnitude of the snapback late in the session. Midsession, the market had the potential for a watershed decline, and its ability to resist that is encouraging.
The daily model is bullish today. TOT daily traders are advised to go 400% long at SPX 1366 stop. If the SPX declines to 1362 before reaching 1366, lower the entry stop to SPX 1364. And for each additional 2 point decline, lower the entry buy stop by an equivalent 2 points. Once long, use a 1% protective sell stop on the position.
Thanks for the opportunity to be of service, and I’ll update again sometime during today’s trading session.
Turov on Timing is Copyright © 2012 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.