The SPX declined 3.03 points Friday to close at 2164.45. TOT daily traders were on the sidelines for the session. For the week as a whole, TOT daily traders suffered a loss of 108.69 cumulative SPX points. It was our worst loss since the 142.08 weekly loss suffered during the week ending October 24, 2014. In 2014, it took until November 25, 2014 almost exactly one month later, before TOT daily traders recouped that entire loss. And from then through the end of 2014, about five weeks later, not only had the entire loss been recovered, but TOT daily traders were up by 325.98 cumulative points. So, while the loss last week is frustrating, from an historical perspective, it was rare but not extremely rare, and in the most recent (2014) case, it was completely reversed (and then some) by year end. While guarantees are never possible (or allowed) in the stock market, I expect something similar to occur in 2016.
Since initiation of the Turov on Timing service on September 30, 1993, our daily trader recommendations have gained 16904.80 cumulative SPX points, compared to a gain of 1705.52 points in the index itself over the same period. That’s a ratio of 9.91 to one. (Please note that any day in which the daily model fails to outperform the SPX by at least a ratio of +9.91 to one, since that’s the ratio of outperformance already achieved, that ratio will decline.)
(The commentary in this paragraph last updated November 10, 2016) The super long term perspective (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 believe that, adjusted for REAL inflation (not the funny numbers the Social Security Administration uses) the stock market will be lower in real dollars in 2020 than it was in 2000. For a long time, I’ve been saying, “I also expect that our new 2016-elected President will have some very serious problems during his/her single term in office.” That belief stands.
(The commentary in this paragraph last updated November 11, 2016.) The Intermediate Term Model is bearish, although market leadership rotation will likely be more pronounced than usual.
In a car race, sometimes a car will go into a spin and hit the wall. If you could pause the TV and “guess” what will happen next, the answer you have to come up with is, “I don’t know.” Sometimes the car stays upright and a few moments later the driver exists, unharmed. And sometimes, the car flips over several time, bursts into flames, and the driver still exits, unharmed. And sometimes, the car flips over several time, bursts into flames, and the driver dies. I think that’s an appropriate metaphor for what’s going to happen in the stock market right now. On one hand, the market likes the idea of all three branches of government being Republican. On the other hand, the President-elect is untried, untested, and perhaps unpredictable. On one hand, his picking Reince Priebus as Chief-of-staff is clearly an olive branch to the Congressional leadership. On the other hand, his picking Stephen Bannon as chief strategist and senior counselor will certainly anger centrist Republicans and infuriate most Democrats. As to the market, momentum is powerful, but historically, momentum carries the day until it doesn’t. I’ve said many times over the years, “a market never looks better than on the day it hits a new high.” In a nutshell, on the fundamentals, I don’t know if they’re strong enough to keep this rally going, and unfortunately, my daily model is dead neutral for today, and my Intermediate Term Model is hanging on to its reading by a thread. Most market prognosticators always have an opinion. Well, I don’t. Sometimes, I simply don’t know – and I’d rather declare that honestly than try to fake it and seem like a know-it-all when I don’t. S&P futures are up about ½% overnight, and if that holds a dozen hours from now when the regular market opens, the enigma is whether that will hold throughout the day. Of the 1705.52 points that the SPX has gained since I started writing Turov on Timing at the end of September 1993, only 61.92 of those points have occurred on Mondays. So, reluctantly, and with humility, my advice for today is to stand aside.
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 © 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 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.