This is Turov on Timing for Monday, January 25, 2010.
The Standard & Poor’s 500 Index (“SPX”) declined 24.72 points Friday to close at 1091.76 TOT daily traders came into the session 200% short and have held that position overnight and into today.
The super long term perspective for the stock market remains bearish (as it has been since January 2000). I expect that the bear market will resume in earnest later this year, leading to a possible end to that decade long perspective at lower prices in 2011 or 2012. But we’re certainly not at that point yet.
The Intermediate Term Model has upticked from bearish to neutral. Repeating, THE INTERMEDIATE TERM MODEL IS NOW NEUTRAL.
On my 10:55 intraday update Friday, I said, “the potential MAGNITUDE of a decline is significantly greater than the potential magnitude of an advance,” and we certainly saw a “magnitude” decline Friday. In that same update, I also said, “The only reason I’m not recommending increasing the short position is that on a very short term basis, the market is oversold and could bounce anytime.” Such a bounce seems ready to occur. Cover your short position at the market and move to the sidelines.
Furthermore, if both the SPX and the NDX are in positive territory at 10:45, the odds are about 5:2 that the advance will continue. If that occurs, TOT daily traders are advised to go 300% long at the market at that time. If you go long, use a 1% sell stop on the position. If not stopped out, sell your position on the close and go overnight flat.
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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