This is Turov on Timing for Wednesday, December 22, 2010.
The SPX advanced 7.52 points yesterday to close at 1254.60. TOT daily traders took a loss on a 300% short position. We are currently flat.
Since initiation of the Turov on Timing service on September 30, 1993, our daily trader recommendations have gained 12136.34 cumulative SPX points, compared to a gain of 795.67 points in the index itself over the same period. That’s a ratio of 15.25 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, expect another nasty crash to perhaps finally bring an end to the long term bear market that began in 2000.
Despite the Intermediate Term Model having clearly been premature in turning bearish, the model still remains bearish. Although excessive bullish sentiment was not a factor in its turning bearish, it now is a significant reason for its remaining bearish. However, the odds are increasing rapidly that this overbought condition can get more extreme before it corrects, and the chances of an improvement in the Model are increasing – despite my being rather unhappy at that possibility.
The daily model is bullish today, and in the absence of bad news, the market should squeeze some of the shorts. Preliminarily, I look for a modestly soft opening, followed by a rally through mid-1250’s resistance, with a close up around 1260. Also preliminarily, we are likely to give some of that expected gain back on Christmas Eve.
TOT daily traders are advised to go 300% long at SPX 1256 stop or at SPX 1251 limit, whichever comes first. Once long, use a 1% protective buy stop on the position. If not stopped out prior to the close, liquidate the position on the close and go overnight flat.
Thanks for the opportunity to be of service, and I’ll email you again in 24 hours – or sooner if circumstances warrant.
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