The SPX advanced 27.16 points yesterday to close at 803.92. TOT daily traders went 200% short at SPX 797 on Wednesday and covered the position yesterday at SPX 780.
Since initiation of this service on September 30, 1993, our daily trader recommendations have gained 7163.21cumulative SPX points compared to a gain of 344.99 points in the index itself over the same period.
The super long term perspective for the stock market remains bearish.
Both the long and short term models remain bullish.
On Wednesday’s hotline I said, “If… the market gets smashed today or tomorrow, it’s likely to be the low for the year.” Well, it got smashed, and then yesterday it fell further to a new bear market low before staging a strong rally. So, it’s possible that I’ve called the bear market bottom to the day. Only time will tell.
However… All is not well with the market outlook. Let’s first look at the bullish factors. Most important is the indicator I reported on yesterday which has a very strong track record. Second is that the market did advance smartly. And thirdly, the long and short term models remain bullish.
But now let’s look at the negatives. For one, in a market that accelerates events more than in the past, it’s possible that yesterday’s rally WAS the rally I was looking for today, that it was “borrowed” from today, and the market’s already responded. For another, my intraday model was showing significant negative divergence all day yesterday, so much so that I went short for discretionary accounts late in the session. (When the market then declined 5 points, I entered a break-even stop which was elected, so we didn’t make a money on the trade, but I wanted to give you a flavor of just how negative that divergence was yesterday.) Also, up to down volume was an uninspired 4:1, not the 9:1 that I’d like to see on a true reversal. Volume was healthy, but not outstanding. Breadth on the NYSE was good but not great at just under 2:1, and breadth on NASDAQ was good but not great at 3:2. Only two of the NYSE 10 most active stocks were up by more than a point. The market ran into resistance again in the area just below 810, the third time a rally has stopped there. Most worrisome is that even though the aforementioned component of the daily model is bullish, the overall daily model is only slightly bullish.
So while I’m not remotely afraid to stick my neck out (how many people would call in advance for a specific day to be the bottom?), I’m about as excited about being bullish today as Bud Selig is to see Minnesota in the ALC series (for you non-baseball fans, that’s “not much”). Bottom line: I’m going to stand aside until the intraday model stops showing negative divergence on rallies OR shows positive divergence on any retracement.
Thanks for the opportunity to be of service to you, and I’ll email you again at an appropriate time sometime during today’s trading session.
Turov on Timing is Copyright (c) 2002 by Turov Investment Group Inc. All rights reserved. Turov on Timing is for personal use only. Re-publication and distribution is strictly prohibited. No part may be reproduced without the permission of the publisher.