The SPX advanced 0.67 point Friday to close at 1140.60. TOT daily traders came into the session 400% short and have held the position overnight and into today.
Since initiation of this service on September 30, 1993, our daily trader recommendations have gained 8319.74 cumulative SPX points compared to a gain of 681.67 points in the index itself over the same period.
The super long term perspective for the stock market remains bearish, and it’s unlikely anything will change that for several years.
The long model remains neutral, and the short term model remains bearish.
ONE WEEK AGO, I wrote the following: “Finally, my prediction of the week: I logged into yahoo.finance on Saturday morning and came across the following story headline, taken from CBS.MarketWatch.com: “U.S. stocks face another listless week.” Under my personal theory that the news media is about as correct in their opinions (when they report those opinions as news) as are the baseball or football prognosticators at the beginning of the season, I predict (using Microsoft Word’s antonym finder for “listless”) an “energetic” week.” Well, for the record, this week yahoo.finance summed up the last week as “a wild ride this week, with fears of higher interest rates one day and euphoria over earnings reports the next.” I may not always be certain whether the market will go up or down, but I am almost always certain that the news media’s commentaries are usually worse than useless.
One reader emailed me over the weekend asking whether the recent rise in the market might simply be a function of rising earnings. For reasons I will discuss in detail at my February 2005 San Diego seminar, historically, the market had performed MUCH better when earnings have been DECLINING, and the market has been at its worst when earnings have been ADVANCING. So the simple answer to the question is, “it’s possible, but statistically, it would not be the most probable cause.”
The daily model is solidly bearish today. Since the daily model has a built in “in-effect-stop” (i.e., it’s not a real stop, but rather a “what’s going on?; this is confusing; let’s move to the sidelines thermostat), it’s very unusual for the market to move in the opposite direction from the model for three days in a row (as it has) AND for the model to RETAIN the same reading. Far more often than not, when that happens, the market eventually moves in the direction of the model’s “prediction” to a significant extent – but not before some stomach churning occurs.
TOT daily traders come into today’s session 400% short. Maintain the protective buy stop at SPX 1143. If not stopped out, carry your position overnight and into tomorrow.
Thanks for the opportunity to be of service, and I’ll email you again in 24 hours – or sooner if circumstances warrant.
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