The SPX advanced 2.82 points yesterday to close at 990.31 in one of the wildest sessions in a while. TOT daily traders went 200% short at SPX 994 on Tuesday and were stopped out at SPX 1004 yesterday.
Since initiation of this service on September 30, 1993, our daily trader recommendations have gained 7770.71 cumulative SPX points compared to a gain of 531.38 points in the index itself over the same period.
The super long term perspective for the stock market remains bearish, and it’s unlikely anything will change that for several years.
The long term model remains bullish, and the short term model remains neutral.
A few weeks ago a team of doctors in Singapore operated around the clock in an effort to separate two Iranian twins joined at the head. Both of their patients died. This was despite the awesome talents of the surgeons. A classic case of “the operation was a success but the patients died.” On a less heroic scale, while we were stopped out by the narrowest of margins on our short position, the daily model did an awesome job yesterday. Three significant economic news developments were announced early in the day. Each of them alone was fundamentally important enough to warrant a ten point S&P rally. But the S&P closed the day up a mere three points, a testimony, in my opinion, to the power of the daily model’s bearish call. As I’ve said in the past, a bullish daily model reading doesn’t mean the market won’t go down if the news is bad, and a bearish reading doesn’t mean the market won’t go up if the news is good. Rather, over time, the differential in the MAGNITUDE of moves is what has made the daily model so profitable.
The first day of the month is typically a stronger than average day, but the first day of August is one of the weakest first days. Even without that dichotomy, the daily model is neutral today. TOT daily traders should stand aside. Have a great weekend, thanks for the opportunity to be of service, and I’ll email you again in 72 hours – or sooner if circumstances warrant.
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