The SPX advanced 31.40 points Friday to close at 835.32. TOT long term and short term investors were long for the session. TOT daily traders were on the sidelines for the session.
Since initiation of this service on September 30, 1993, our daily trader recommendations have gained 7163.21cumulative SPX points compared to a gain of 376.39 points in the index itself over the same period.
The super long term perspective for the stock market remains bearish.
Both the long and short term models remain bullish.
Despite the bullishness of the long and short term models, I’m unimpressed by the advance. Breadth on the NYSE ended up at 8:1, excellent but not the 9:1 critical level. On the NASDAQ, it was an even less impressive 4.4:1. On the two exchanges combined, it was 5.8:1.
Most significantly, EVERYONE is saying how bullish it is that we’re in the going into the third year of the election cycle. EVERYONE is saying how bullish it is that we’re now in the favorable October to May period. EVERYONE is saying that when the two factors combine, the market will go up. Well, when was the last time that EVERYONE was right? Not since when Adam was still a bachelor!
Tempering Monday’s opening somewhat will likely be some concerns over the terrorist bombing in Indonesia and fears about all the earnings reports this week. But fear and panic have dissipated very rapidly in the wake of Thursday’s and Friday’s advances. So, while I will continue to follow what the models say, there is a big part of me that wouldn’t be remotely surprised if we come down again later this month or next month and break last week’s lows. This is an historic bear market, and history only repeats itself when new history is not being made.
The daily model is modestly bullish today, but I’d be reluctant to buy strength. TOT daily traders should go 100% long at SPX 826. If you go long, use a 10 point protective sell stop. If not stopped out, carry your position overnight and into tomorrow.
Thanks for the opportunity to be of service to you, and I’ll email you again at an appropriate time sometime during today’s trading session.
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