This is Turov on Timing for Monday, October 24, 2011.
The SPX advanced 22.86 points Friday to close at 1238.25. TOT daily traders came into the session 200% short and covered the position at SPX 1231.60. We are currently flat..
Since initiation of the Turov on Timing service on September 30, 1993, our daily trader recommendations have gained 12535.11 cumulative SPX points, compared to a gain of 779.32 points in the index itself over the same period. That’s a ratio of 16.08 to one.
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). When the current cyclical bull market ends (and at present, it is quite possible that it has already ended, the major doubt factors being the upcoming presidential election, the European debt crisis, and the Congressional budget battles), expect another nasty crash to perhaps finally bring an end to the long term bear market that began in 2000.
The Intermediate Term Model remains bullish.
The much-anticipated European Sunday conference conferred little in the way of new information to the world – more hopeful soundings but no new hard decisions. Futures overnight responded with a yawn.
We have a complicated situation today: First, as has been widely blogged, the Monday following October’s option expiration has been up in each of the past 14 years. However, as the bloggers ignore, most of those cases have followed uneventful option expiration Fridays. And as you know, this past Friday was anything but uneventful. Second, the daily model is bearish, but my NASDAQ model is quite bullish. Now the last time we had a discrepancy like that was this past Thursday when I announced, “The daily model is very bullish, but the NASDAQ 100 model is modestly bearish.” The response to that dichotomy was a day in which “the SPX advanced .46% and the NASDAQ 100 declined .45%.” But that perfect call is unlikely to be repeated, in my opinion. Far more likely is that either the NASDAQ will pull the SPX up or the SPX will pull the NASDAQ down. Nevertheless, I do believe a hedged position of long the NASDAQ 100 and short the SPX will prove profitable, especially if adjusted for volatility (e.g. 43% long QQQ and 57% short SPY). But that is not an “official” recommendation of this SPX-based service.
So what to do – especially in an environment where any burps from the European PIGS could have such a major impact? Good question. Anyone have an answer?
The answer is that there is no “right” answer. I like my “unofficial” recommendation, and “officially,” we will stand aside.
Thanks for the opportunity to be of service, and I will update again in 24 hours – or sooner if circumstances warrant.
Turov on Timing is Copyright © 2011 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.