The SPX declined 2.95 points yesterday to close at 2141.34. TOT daily traders went 200% long at SPX 2142 and sold the position on the close.
Since initiation of the Turov on Timing service on September 30, 1993, our daily trader recommendations have gained 17084.47 cumulative SPX points, compared to a gain of 1682.41 points in the index itself over the same period. That’s a ratio of 10.15 to one. (Please note that any day in which the daily model fails to outperform the SPX by at least a ratio of +10.15 to one, since that’s the ratio of outperformance already achieved, that ratio will decline.)
(The commentary in this paragraph last updated October 20, 2016) The super long term perspective (a prediction, not a forecast!) for the stock market remains bearish (as it has been since January 2000 after having been bullish for over 25 years, from December 1974 until then). I believe that, adjusted for REAL inflation (not the funny numbers the Social Security Administration uses) the stock market will be lower in real dollars in 2020 than it was in 2000. For a long time, I’ve been saying, “I also expect that our new 2016-elected President will have some very serious problems during his/her single term in office.” With Trump’s incredible statement about not being sure if he’d “accept” the election results, it is hard to imagine his winning the election. Hillary will probably win next month, but I’d be astounded if she wins a second term. FACT: No president has won consecutive terms following the completion of two elected terms of a president of the same party since the 1820 re-election of James Monroe (who was the first and only one to do it – and oh yes, he ran unopposed, the only president other than George Washington to have had no opponent).
(The commentary in this paragraph last updated October 17, 2016.) The Intermediate Term model remains bearish. The risk of a major selloff seems less than the super-bears believe, in my opinion.
The after-the-close news of importance yesterday was Microsoft’s earnings which caused the stock to rally almost 6 points in after-market trading. It is a certainty that MSFT will open up significantly on Friday morning from its 4:00 close Thursday. Whether it is able to pull the market higher will be very important. The most bullish case would be if it gains more than a point from its opening gap and holds it; I don’t expect that to happen. The most bearish case would be if the market opened strongly higher and then sold off strongly. Having gone short for all managed accounts that permit short selling, and having recommended short positions on the close yesterday in our sister publication, Turov on Overnight Possibilities, I can only hope. Confusing the issue, somewhat, is that today is options expiration, and a lot of trading will be unrelated to true supply and demand, rather than position squaring.
In any event, the daily model is bearish today, and I expect lower prices once the MSFT dust settles. TOT daily traders are advised to go 200% short at SPX 2140 stop. If the SPX advances to 2144 before declining to 2140, raise the entry sell stop to SPX 2142, and for each additional 2 point advance, raise the entry sell stop by an equivalent 2 points. Once short use a 1% protective buy stop on the position.
Thanks for the opportunity to be of service and I’ll email you again later today.
Turov on Timing is Copyright © 2016 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 including the fact that past performance is not a guarantee of future performance. Re-publication and distribution is strictly prohibited. No part may be reproduced without the permission of the Turov Investment Group Inc. All recommendations are based on the Standard & Poor’s cash index (SPX) which cannot be directly traded and Turov Investment Group Inc. makes no recommendation or suggestion to readers as to how SPX-based recommendations should be traded but rather leaves that to the discretion of each individual reader. The “official” price of the opening and closing SPX is as reported at www.bigcharts.com and may not be consistent with futures or ETF prices. All recommendations are based on that “official” price. Any recommendation that is to take place at a specific time is basis the “opening” on a one minute bar chart beginning at that time and ending one minute later. All times mentioned are Eastern. Questions related to this service should be directed to InvestmentAdvice@aol.com.