This is Turov on Timing for Monday, August 8, 2011.
The SPX declined 0.69 points Friday to close at 1199.38 in a session that was anything but as flat as that number would indicate. TOT daily traders were on the sidelines for the session, and we are currently flat.
Since initiation of the Turov on Timing service on September 30, 1993, our daily trader recommendations have gained 12483.16 cumulative SPX points, compared to a gain of 740.45 points in the index itself over the same period. That’s a ratio of 16.86 to one.
The super long term perspective for the stock market remains bearish (as it has been since January 2000 after having been bullish from December 1974 until then). When the current cyclical bull market ends, expect another nasty crash to perhaps finally bring an end to the long term bear market that began in 2000.
I’m embarrassed to say so, but the Intermediate Term Model remains bullish. Unless the market has a BIG rally, that’s likely to change in the next week or so.
The S&P downgrade late Friday, while not totally unexpected, is probably going to give the market more volatility fits. Anything can happen. The first response has been a sharp decline in overnight futures prices.
The downgrade of US debt is unprecedented, and as such, well… there is no precedent on which to estimate a reaction. Downgrades of other nation’s debt (e.g., Spain, Japan, Ireland) have had very different market reactions from one another, but they are not the United States of America (drum roll…).
Will the market sell off sharply and then mount a V recovery? Or just stay down? Or keep going lower since the economy really sucks!? I’m sorry, but my crystal ball is being used in a game of dodge ball between the tea party and the left wing dogmatists. And my models simply are irrelevant in the face of such unprecedented (there’s that word again) news.
If you think this is all leading up to a recommendation that we stand aside, Bingo! Watch this show from the sidelines.
Thanks for the opportunity to be of service, and I’ll email you six hours before the start of Tuesday’s session – or sooner if circumstances warrant.
Turov on Timing is Copyright © 2011 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.