On the heels of bearish comments from two Fed Governors, the SPX declined 53.49 points Friday to close at 2127.81. TOT daily traders stayed on the sidelines as our entry stop was not elected.
Since initiation of the Turov on Timing service on September 30, 1993, our daily trader recommendations have gained 16859.51 cumulative SPX points, compared to a gain of 1668.88 points in the index itself over the same period. That’s a ratio of 10.10 to one. (Please note that any day in which the daily model fails to outperform the SPX by at least a ratio of +10.10 to one, since that’s the ratio of outperformance already achieved, that ratio will decline.)
(The commentary in this paragraph last updated April 15, 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. I also expect that our new 2016-elected President will have some very serious problems during his/her single term in office.
(The commentary in this paragraph last updated September 1, 2016.) Our most recent bearish call was clearly premature, and I do not expect a complete reversal of the market’s gain since this signal was generated; however a decline down to about SPX 2110 would not surprise me. That is not a goal or an objective, but rather a reasonable reevaluation point.
An email from a sharp eyed subscriber pointed out an error I made in Friday afternoon’s interim message. I said, “there is only one serious case during a bull market of a really bad Monday following a really bad Friday — and that was just this past June 24 & 27 in the aftermath of the Brexit vote.” That was incorrect: August 21 and 24, 2015 was another case.
As I have often said, news will always trump any model, and Friday was no exception. Today MAY be another day of news being important. Yesterday, Hillary Clinton was diagnosed with pneumonia, two days after having been diagnosed and after two days of keeping it a secret. While most people recover from pneumonia, about 1% of those afflicted die from it. On top of the other Clinton health issues that Trump has shouted about, the market may be soft in the early going today as it raises the possibility that Clinton may lose the votes of those who may be reluctant to vote for someone with health issues. On the other hand, if the affliction is greater than it currently seems, and if Clinton were to step aside (either by choice or circumstances beyond her control), I think the Democratic Party would pick Joe Biden to replace her (despite his age). And while Biden is an Obama clone in many ways, he would likely have an easier time against Trump than Clinton. And this year, it seems that the market would prefer the devil it knows more than the devil who frightens it.
Overnight Asian markets are down about 2% (which is partially catch-up from Friday’s US market slump), and US S&P futures are down about ½%. If that decline holds, it will bring the cash market down to about the level I mentioned in my September 1 Intermediate Term commentary (reprinted above) as a reevaluation point.
The market will almost certainly open lower today, and that may provide a decent buying opportunity. TOT daily traders are advised to go 200% long on a buy stop 2 points above the 9:35 SPX price. If you go long, use a 10 point protective sell stop on the position.
Thanks for the opportunity to be of service and I’ll email you again later today.
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.