The SPX declined 64.84 points Friday to close at 1970.89. TOT daily traders went 300% long in the morning and were stopped out with a 15 point loss per unit. We are currently flat.
Q&A: I have received several emails asking me how Turov Investment Group managed annuity accounts are doing so far this year. Answers: As of right now, even after last week’s sharp market decline, the Annuity Program is UP 13% year to date, which is equal to an annualized rate of +20%, AFTER deduction of all fees and expenses. The Sector Program is up 31% year to date, which is equal to an annualized rate of +48%, AFTER deduction of all fees and expenses. This compares to a to a 4% decline, year to date, in the Standard & Poor’s 500 Index (-6% annualized), and an 8% decline, year to date, in the Dow Jones Industrial Index (-12% annualized). While the Sector Program has outperformed the Annuity Program year-to-date, I expect the reverse to be true over the long term. Both Programs are currently 100% in the Nationwide money market fund. The minimum size account for each is $100,000, and a Disclosure Document of each appears at www.DanielTurov.com.
COMMENTARY: Karl Marx would be choking on his schnitzel,and Mao Zedong would be executing people at a faster rate than Kim Jong-un if they knew that the People’s Republic of China even had a stock market, and the very pragmatic Vladimir Lenin would jump for joy seeing how the Chinese Communist Party’s authorized stock market was causing havoc in the United States and the rest of the semi-capitalist world! What a creative weapon of mass (financial) destruction the Chinese have created, Joseph Stalin would have chortled. No wonder that “Make America Great” has become the slogan of the leading Republican Presidential candidate. Over 5 trillion dollars in asset losses in the Western world are because the Shanghai stock market fell 11.5% last week. Shame, shame, shame on the leadership (both parties) of the United States for allowing our economy to become so dependent on China’s. And the suggestions I would make to reverse the trend have absolutely no chance of becoming law since the masses have no understanding of economics. (For but one example, eliminating the minimum wage and having the government make up the difference with what Milton Friedman called the “negative income tax” or what today is called “the earned income credit” would bring back to America millions of jobs, increasing our national economic strength and decreasing that of all the places that now make the products that Wal-Mart imports. But the masses want increases in the minimum wage so that hamburger flippers don’t live in poverty – which, with Medicaid, food stamps, subsidized housing and the earned income credit, and other items that are not included in wage calculations, they are not enduring now anyway. The ILGWU was once a major union in America, producing massive amounts of clothing. It couldn’t survive, so it merged with another union which then merged with another, until that one virtually disappeared. Now we buy most of our clothing from Bangladesh, Pakistan, Jordan, and other third world countries, and the former textile workers in America collect welfare because US minimum wage laws preclude American firms from manufacturing here. But eliminate the minimum wage? Not a snowball’s chance in hell.) Anyway, returning to where I started before digressing, I’ve always stated that news will trump any model, and news from China is the world’s stock market magnet right now.
Since initiation of the Turov on Timing service on September 30, 1993, our daily trader recommendations have gained 15766.02 cumulative SPX points, compared to a gain of 1511.96 points in the index itself over the same period. That’s a ratio of 10.43 to one. (Please note that any day in which the daily model fails to outperform the SPX by at least a ratio of +10.43 to one, since that’s the ratio of outperformance already achieved, that ratio will decline.)
(The commentary in this paragraph last updated August 24, 2015) The super long term perspective (i.e., it’s 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). The cyclical bull market that began a few years ago may have ended last Friday, but that’s unclear at present. For a long time, I have written that I expect “to see a bear market of 35% to 50% magnitude” but I do not have enough evidence to say that this is the beginning of a decline of that magnitude. Regardless, I expect to see our new 2016-elected President have some very serious problems during his or her single term in office.
(The commentary in this paragraph last updated August 24, 2015.) Weekly data, available only on the weekend, was surprising in that it proved catalytic in moving the Intermediate Term Model to bearish. I do not like going short into weakness, but the Intermediate Term Model has downticked to bearish. However, that reading is not as strong as might seem obvious by last week’s sharp selloff, and a reversal is possible sooner than might seem emotionally reasonable.
While the directional component of the daily model is bearish today, the risk component of the model is in the stratosphere, moving the overall model into its default neutral mode. We will stand aside for the time being.
Thanks for the opportunity to be of service, and I’ll email you again in 24 hours – or sooner if circumstances warrant.
Turov on Timing is Copyright © 2015 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 stop 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.