This is Turov on Timing for Monday, February 25, 2008.
The SPX advanced 10.58 points Friday to close at 1353.11. TOT daily traders took a small scalping loss in the morning and then moved to the sidelines. We are currently flat.
TOT daily traders have outperformed the SPX in 21 of the past 34 weeks.
Since initiation of the Turov on Timing service on September 30, 1993, our daily trader recommendations have gained 10032.81 cumulative SPX points, compared to a gain of 894.18 points in the index itself over the same period. That’s a ratio of 11.22 to one.
The super long term perspective for the stock market remains bearish (as it has been since January 2000), and it’s unlikely anything will change that for several years.
The intermediate term model remains bearish, although it’s a weak signal. The market continues to respond to the news of the moment more than usual as it has very little internal direction of its own. I expect the market to move up during the first part of the week and then get soft near the end of the month – contrary to “normal” seasonality.
On Friday’s 11:00 a.m. intraday hotline, with the SPX down about a dozen points a the time, I said, “don’t be surprised if this market turns around today and closes higher.” Well, that’s exactly what it did.
One question that could be asked is, “Did it turn around because of the validity of my intraday model, or did it turn around because of the late day Ambac rumor?” Here’s the answer: A TOT signal of any kind does not predict what the market will do; it evaluates the probability of a given move. So, in the absence of any news Friday, the market probably would have moved up from where it was at the time. There’s no question that the Ambac rumor both facilitated the move and augmented its magnitude. Had bearish news come out instead of bullish news, it would have trumped the signal, and the market would have declined BUT with a bullish intraday signal, it would have declined less than if there had been a bearish or neutral intraday signal. On any given day, the news will always trump a signal. Over the long term, however, the random unexpected bullish news and the random unexpected bearish news will balance out, and it will be the efficacy of the cumulative signals that will win the race.
If I weren’t aware of what the futures are doing overnight, I’d say today, “Expect the market to open moderately strong and then move net sideways for the balance of the session.” The problem is that the S&P futures are already up a little more than ½% and that may be the entire early expected move. I don’t want to advise you to go long early on and then see a gap which might be the entire day’s move. So, reluctantly, stand aside. If something dramatic happens on my intraday model Monday, I’ll update. Otherwise, the next update will be in 24 hours.
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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