Another superb day for the home team as the SPX declined 23.67 points Friday to close at 1630.74. TOT daily traders went 200% short at SPX 1652 shortly after the opening and another 300% short at SPX 1646.18 at 3:25 p.m., and then took profits on the close. For the week, the SPX was down 18.86 points, while TOT daily traders were up a whopping 228.84 cumulative points. It was the second most profitable week in TOT’s almost 20 year history. TOT daily traders also went 300% long on Friday’s close and have carried that position over the weekend and into today.
Since initiation of the Turov on Timing service on September 30, 1993, our daily trader recommendations have gained 13802.86 cumulative SPX points, compared to a gain of 1171.81 points in the index itself over the same period. That’s a ratio of 11.78 to one.
(The commentary in this paragraph last updated May 6) 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). For many months I have said that I expect the 2009-2013 cyclical bull market to end in “Spring 2013” and that is still the case.
(The commentary in this paragraph last updated May 16) Intermediate Term Model comment: The “wave” of trading that has brought the market to new highs is unlike any pattern that has appeared during the 21st Century. It is unlike the blowoffs in either 2000 or 2007 or, for that matter, like anything else. To quote Art Cashin on CNBC: “This is a very different kind of market than we’ve ever seen.” I still “believe” that this cyclical bull market will end this Spring, but the evidence to back up that belief is sketchy.
Although the first trading day of June is the only “first day of the month” in which the cumulative SPX shows a loss since 1990 – down 34.40 cumulative points – the SPX-based daily model is bullish today – albeit with a higher degree of risk than I would ideally prefer. TOT daily traders come into today’s session 300% long. Most if not all of today’s expected advance is likely to occur during the first 75 minutes of trading.
Initially, use a protective sell stop at a fairly tight SPX 1625. If the SPX advances to 1635 prior to 10:45, raise the stop to SPX 1630, and if the SPX advances to 1639, take your profit.
At 10:45, if still long and if the extant stop is more than 2 points below the extant price, raise your stop to 2 points below the 10:45 price. And from that point on, for each 2 point advance in the SPX, raise the stop by an equivalent 2 points, until and unless SPX 1639 is reached, at which time, take your profit. If still long as we approach the close, carry the position overnight and into tomorrow.
WARNING! My index models are showing extreme risk in high beta stocks after the first hour of trading or so. If you are trading the SPX or the DJII, the aforementioned guidelines are fine, but if you are trading individual NASDAQ or Russell stocks, I would not want to be long in them past the first hour of trading. The risk of air pockets in individual high beta stocks is high, and even stop orders in them may not be sufficient to protect long positions in such issues.
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 © 2013 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. 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.