The SPX declined 0.9 point yesterday to close at 2474.02. TOT daily traders were on the sidelines for the session.
Since initiation of the Turov on Timing service on September 30, 1993, our daily trader recommendations have gained 17300.08 cumulative SPX points, compared to a gain of 2015.09 points in the index itself over the same period. That’s a ratio of 8.59 to one. (Please note that any day in which the daily trader recommendation fails to outperform the SPX by at least a ratio of +8.59 to one, since that’s the ratio of outperformance already achieved, that ratio will decline.)
(The commentary in this paragraph last updated August 1, 2017) The super long term perspective (a prediction, not a forecast!) for the stock market remains bearish (within the context of a medium term bull market). I believe that, adjusted for REAL inflation (not the funny numbers the Social Security Administration uses) the stock market may be lower in real dollars in 2020 than it was in 2000, although higher in nominal dollars. For a long time, I’ve been saying, “I also expect that our new 2016-elected President will have some very serious problems during his/her single term in office.” That belief stands, and we see it happening already.
(The commentary in this paragraph last updated August 1, 2017.) Despite the 1999 feel to the market, the Intermediate Term Model remains bearish. While the market could certainly move higher in the short run, by Labor Day I expect to see it lower than it is now. I do not believe such a decline will be the death knell for this medium term bull market, and it could well offer an opportunity for us to partake of the last phase of the bull market.
The news-neutral daily model is bullish today, but I would take that with a grain of salt because the market is not news-neutral at present. All four (NDX, SPX, RUT, DJII) of my Index models are bearish for the period of Wednesday’s close through 10:45 today. That is a clear-cut conflict between the daily model and the index models. While I’m still researching the historic resolution of such conflicts, so far it seems that the index models “win.” But here’s where it gets interesting: The index models look bullish for today for the period 10:45 through the close. I’m skeptical about that also, because of the Korean situation, but I don’t like to ignore my data, especially when the daily and index models are in agreement, as they are post 10:45. So here goes: TOT daily trader are advised to go 200% long on a buy stop 2 points above where the SPX is at 10:45. For example, if the SPX is at 2470 at 10:45, the recommendation would be to go 200% long at SPX 2472 stop. If and when you go long, use a 1% sell stop on the position.
POLITICAL COMMENTS: As I watched the market rally late in the session, I commented to my research assistant, “I think a lot of traders are under-estimating the danger of the Korean situation.” A short time ago, I came across a web page (https://www.cnbc.com/2017/08/09/investors-are-underestimating-north-korea-risk-says-ex-nato-commander.html) which quotes former NATO Supreme Allied Commander Wesley Clark saying, “Investors are underestimating the risk of tensions between the U.S. and North Korea… I see a market generally under recognizing geostrategic risk.” He added, “Perhaps another reason investors haven’t reacted strongly to Trump’s comments is because they know there has been tension with North Korea for a long time. They know the United States intends to fulfill its obligations to our allies in the region, and they see the rhetoric as nothing but rhetoric at this point,”
Another interesting observation: As you know, on Tuesday, North Korea’s state media said the country was considering a strike on the U.S. Pacific territory of Guam with mid- to long-range missiles. At website https://www.cnbc.com/2017/08/09/pentagon-plan-for-pre-emptive-strike-on-north-korea-would-reportedly-launch-from-base-in-guam.html, it was reported that “The Department of Defense would deploy B-1B bombers in a pre-emptive attack on North Korea if the commander-in-chief ordered such a strike, NBC News reported Wednesday, citing two current and two former senior military officials. The officials told NBC that the attack would originate from the Andersen Air Force Base in Guam. Multiple people told NBC that the strike would target roughly two dozen missile-launch sites in North Korea.” I was surprised: Kim apparently knew this when he “targeted” Guam as his target, indicating better “intelligence” than I would have credited his government with.
Thanks for the opportunity to be of service, and I’ll email you again in 24 hours – or sooner if circumstances warrant.
Turov on Timing is Copyright © 2017 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.