This is Turov on Timing for Friday, October 19, 2007.
The SPX declined 1.16 points yesterday to close at 1540.08. TOT daily traders were on the sidelines for the session and missed absolutely nothing.
TOT daily traders have outperformed the SPX in 11 of the past 15 weeks and are still slightly ahead of the game so far this week.
Since initiation of the Turov on Timing service on September 30, 1993, our daily trader recommendations have gained 9906.09 cumulative SPX points, compared to a gain of 1081.15 points in the index itself over the same period. That’s a ratio of 9.16 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.
The intermediate term model remains bearish.
The daily model is massively bearish today. The odds of the market declining are approximately 8.5 to 1. If the market does decline, the odds of the decline being at least 1% are approximately 1.4 to 1, and the odds of the decline being at least 2% are approximately 0.6 to 1. These are huge numbers. (By the way, please do not ask me to report odds on a regular basis as there are several reasons why I do not wish to do this, predominantly legal reasons. In that vein, please understand that these odds of 8.5 to 1 are NOT the same as a certainty. Losses are very definitely possible, and since I am going to recommend a very large position today, large losses are possible.)
TOT daily traders are advised to go a maximally bearish 500% short at the market. Since I expect the market to be VERY volatile today, use a disaster-only protective stop 20 points above your short level. So we are risking a maximum 100 cumulative points to gain a potentially significant amount of cumulative points, but the potential for gain is worth it, in my opinion. And while this is my “official position” and I am comfortable with it, if you are not, then please take a smaller position and/or use a tighter stop. This service is intended for sophisticated investors only.
A miscellaneous note: This position has absolutely nothing to do with the anniversary of the 1987 crash, nor anything substantial with October seasonality. They are merely coincidences.
If still short on the close, cover your position on the close – win, lose, or draw – and go into the weekend flat. In the absence of a news surprise, Monday morning is more likely to be up than down! I do expect a substantive decline today; I do not expect a market meltdown.
Finally, an administrative matter, in answer to a subscriber’s email: At the end of each message, I thank readers for the opportunity to be of service (which I sincerely mean) and then say when I will email next. Now here’s the important part: If I do not state “or sooner if circumstances warrant” OR specifically state that there may be an intraday update, then it means that I will be traveling or otherwise probably unavailable to monitor the market during the day, and there probably will be no intraday updates. This does not mean there positively will not be one, but it does mean it would be very unlikely. Further – and very important – even when I am unable to monitor the market for TOT purposes, I ALWAYS monitor the market for management purposes except when either (1) clients are 100% in the money market fund or (2) when I know exactly what I want to do at the next NAV cutoff time. And that having been said…
Thanks for the opportunity to be of service, and I’ll email you again at 11 a.m. Eastern time today.
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.