The SPX advanced 19.18 points yesterday to close at 879.20, reversing Wednesday’s loss. TOT daily traders went 100% short (i.e. a 1/5 position) at SPX 878, although futures traders probably got in about 6-8 points better than that. I covered this futures versus cash discrepancy in detail in the October 2000 monthly issue of Turov on Timing, and new subscribers may receive a free copy of that back issue by emailing me with “October 2000” in the message line of your email.
Since initiation of this service on September 30, 1993, our daily trader recommendations have gained 7162.01 cumulative SPX points compared to a gain of 420.27 points in the index itself over the same period.
The super long term perspective for the stock market remains bearish.
The long term model remains bullish, and the short term model remains neutral.
While the 239 point gain in the DJII was impressive, up to down volume was just slightly better than 2:1 (i.e., no big deal) and futures closed lower than where they opened – a frequent sign of distribution.
As is often the case on options expiration Fridays (because higher volatility risk raises the standards necessary to generate a valid buy or sell signal) the daily model is neutral today. Officially, TOT daily traders are advised to cover their short on the opening. Unofficially, futures traders might consider using a buy stop just a few points above the opening, and then scaling it down if the market sells off from the opening. But officially, we’ll move to the sidelines on the opening.
For those looking ahead to next week, a bullish reading on the daily model is a mathematical impossibility for Monday. The best it might do is neutral. Furthermore, if both the SPX and the NYSE advance/decline ratio are negative today, then a bearish reading on the daily model will be extremely likely. We shall see.
Have a great weekend.
Thanks for the opportunity to be of service to you, and I’ll email you again six hours before the start of Monday’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.