The SPX advanced 22.33 points Friday to close at 1040.94. TOT daily traders went 100% long at SPX 1022 and have carried the position over the weekend and into today.
The super long term perspective for the stock market remains bearish.
Both the long and short term models remain neutral.
The daily model is neutral today, reflecting a balance between bullish and bearish forces as the market has reached a modest resistance area of SPX 1040. Furthermore, military news will clearly be significant if there is any. Finally, to those listeners who may be aware of the powerful bullish tendency of the first trading day of the month over the past several years, the past three October firsts have been down 210 Dow points, down 64 Dow points and up 49 Dow points. So the magic of the first of the month has not applied to Octobers in recent years.
Yesterday, Attorney General Ashcroft told CNN, “We believe there are substantial risks of terrorism still in the United States of America. As we as a nation respond to what has happened to us, those risks may in fact go up.” Speaking strictly as a stock market analyst, that reality and accompanying uncertainty cannot be deemed bullish for the market.
TOT daily traders went 100% long at SPX 1022 on Friday. Primarily because of favorable economic news that was announced in mid-morning and secondarily because there was no negative war news, the market ended the session higher. Yet I deem this the most precarious of counter-trend rallies. Maintain your position, but raise your stop significantly to SPX 1034. On the upside, if the SPX reaches 1048, take your profit. If the SPX rises to 1058, go 100% short and use a protective buy stop on that position at SPX 1067. If not stopped out, liquidate your position on the close. Go overnight flat.
Since initiation of this service eight years ago today, our daily trader recommendations have gained 6610.03 cumulative SPX points compared to a gain of 582.01 points in the index itself over the same period.
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