This is Turov on Timing for Friday, January 26, 2007.
The SPX declined 16.23 points yesterday to close at 1423.90. A day after having scalped a 10 point profit from the long side, TOT daily traders went 100% short about 15 minutes after the opening and scalped a 10 point profit on the short position yesterday. We are once again flat.
Since initiation of the Turov on Timing service on September 30, 1993, our daily trader recommendations have gained 8903.50 cumulative SPX points, compared to a gain of 964.97 points in the index itself over the same period. That’s a ratio of 9.23 to one.
The super long term perspective for the stock market remains bearish (as it has been since January 2000), and it’s unlikely anything will change that for several years. I will discuss this “perspective” further in the February monthly issue of TOT.
The damage yesterday was significant enough to downtick the intermediate term model from neutral to bearish. Repeating, THE INTERMEDIATE TERM MODEL IS NOW BEARISH.
On yesterday’s hotline, I said, “After an early morning pop in response to yesterday’s after-the-close positive earnings news, the market is likely to be hit with some profit taking.” That’s certainly what happened. A brief foray into annual new high territory for the SPX, and then the market went into a free fall dive. Whether the catalyst was the housing numbers or the poor Treasury auction, the damage to the market’s internals was severe. Along with a bearish intermediate term model, the daily model is also bearish today. And while I don’t like getting aggressively short this close to what is usually the second strongest month end period of the year, the reading is clear enough to override what would normally be month-end favorable seasonality. Expect a move down to test SPX 1400-1405 within a relatively short period of time.
TOT daily traders are advised to go 400% short at SPX 1421 stop or at SPX 1425.50 limit, whichever comes first. If you go short, use a 1% (per unit) protective stop on your position. If the SPX declines to 1405, lower your stop to SPX 1415, and for each additional 5 point decline, lower your stop by an equivalent 5 points. If not stopped out, carry your position over the weekend and into Monday.
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.
Turov on Timing is Copyright © 2007 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.