The SPX advanced 46.88 points Friday to close at 1940.24. TOT daily traders went 300% short at SPX 1916 and were mercifully stopped out at SPX 1925. In my opinion, the entire day’s gain was a function of the Bank of Japan’s reducing interest rates to negative, accompanied by significant short covering in the U.S. Art Cashin, one of the few CNBC commentators who actually understands the market, said he believes that about 2/3 of Friday’s buying was short covering. I have no basis for disagreeing with him. As I have said often, in the long run, news is random and balances out, but in the short run, it will have its consequences, and it will always trump anybody’s model. Friday was such a day. I’m delighted if I’m right 60% of the time; that also means I’m delighted if I’m wrong only 40% of the time! And I’m especially delighted if the times I’m wrong are because of a news event that neither I nor anyone else could have possible predicted would occur on the precise day that it did!
Since initiation of the Turov on Timing service on September 30, 1993, our daily trader recommendations have gained 16030.12 cumulative SPX points, compared to a gain of 1481.31 points in the index itself over the same period. That’s a ratio of 10.82 to one. (Please note that any day in which the daily model fails to outperform the SPX by at least a ratio of +10.82 to one, since that’s the ratio of outperformance already achieved, that ratio will decline.)
(The commentary in this paragraph last updated November 5, 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). I expect that our new 2016-elected President will have some very serious problems during his or her single term in office.
(The commentary in this paragraph last updated January 26, 2016.) The Intermediate Term Model is bullish. A bear market rally is more likely than a market collapse over the intermediate term time frame.
On Friday afternoon’s Turov on Overnight Possibilities*, I wrote, “Preliminarily, that “bear market rally” (which IMHO got started a day early because of the Bank of Japan announcement), will likely see the SPX advance to 1950-1960 and then run out of steam. We will more than likely see that top sometime next week [i.e., this week].”
I would not be surprised to see the market begin weakly today, as a snapback to Friday’s huge gain. However, if so, the market will probably move somewhat higher afterwards, albeit not by a huge amount (in the absence of significant news).
TOT daily traders are advised to go 200% long at SPX 1944 stop. If the SPX declines to 1936 before advancing to 1944, lower the entry buy stop to SPX 1938 and for each additional 2 point decline, lower the entry buy stop by an equivalent 2 points. Once long, use a 1% protective sell stop on the position. On the upside, if the SPX advances to 1951, take your profit.
If still long as we approach the close, carry the position overnight and into Tuesday.
Thanks for the opportunity to be of service, and I’ll update again in 24 hours – or sooner if circumstances warrant.
* Turov on Overnight Possibilities is a separate service offered only to Turov on Timing subscribers. It is an email service sent to subscribers at about 3:40 to 3:50 Eastern time each afternoon. A one month trial subscription is available ONCE A YEAR only to TOT subscribers for $97, via www.Paypal.com to InvestmentAdvice@aol.com. Trial subscribers may then subscribe for the balance of 2016 at a price of ($997*x/365) with x being the remaining days in 2016.
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 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.