The SPX advanced 1.76 points Friday to close at 1071.38. TOT daily traders went 300% short on Thursday and liqudated the position on the close Friday.
The super long term perspective for the stock market remains bearish.
Both the long and short term models remain neutral.
The S&P futures closed Friday about 3 points below fair value, and as I write this at about midnight, they’re down about 7 points on Globex. So, if nothing changes, that’s about 10 points of downside pressure on the cash index, or about 1%. Of great significance is that, to the best of my knowledge, neither of our primary so-called Arab friends in the Middle East, Saudi Arabia and Egypt, have said anything about the attacks in Afghanistan yesterday. If the mainstream of the Islamic world views yesterday’s actions as a fight against terrorism, then the US is at least on uncertain footing as far as the risk of domestic terrorism goes. But if mainstream Moslems target in on a few civilian casualties in the raids and use that as an excuse for denouncing them, then the risk of US domestic terrorism goes up dramatically. That would not diminish, in my opinion, the justification for continuing the battle against terrorism, but it would, in my opinion, dramatically increase its cost to the US economy – and to the US stock market. Until we know how the so-called moderate Islamic world reacts to the air raids in daylight today, it’s impossible to know how to play this market. If something dramatic occurs, I’ll update with an intraday email. Otherwise, stand aside. If you’re not on my email list and want to get on it, email me at email@example.com
Since initiation of this service on September 30, 1993, our daily trader recommendations have gained 6622.95 cumulative SPX points compared to a gain of 612.45 points in the index itself over the same period.
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