The SPX declined 6.32 points yesterday to close at 984.03. TOT daily traders went 300% long at SPX 979 on Tuesday, another 200% long at SPX 987.50 Wednesday, and have carried the position overnight and into today.
Since initiation of this service on September 30, 1993, our daily trader recommendations have gained 7813.84 cumulative SPX points compared to a gain of 525.10 points in the index itself over the same period.
The super long term perspective for the stock market remains bearish, and it’s unlikely anything will change that for several years.
Both the long and short term models remain bearish, although only by the narrowest of margins. However, if contrary to expectations, the market is down today, those margins will widen.
I’m always fascinated by the news media’s “answers” to why the stock market did whatever it did on a given day. For example, one very typical report yesterday stated, “Treasury prices dropped and bond yields rose on Wednesday, adding more pressure on stocks. Investors fear that rising bond yields could choke economic growth by hiking borrowing costs, crimping the rebound so many stock investors were betting on.” Without anything else to go on, most of the other news reports regurgitated the same pabulum and found other market “experts” to repeat it. Well, then, if that’s the real story, please explain to me why was it that most of the damage to bond prices occurred before the NYSE opened at 9:30 and yet the S&P futures opened UP in the morning from their Tuesday close?! And if that news story is the real reason for lower stock prices, please also explain to me why the market declined a half dozen SPX points from the opening through 10:00 while bonds were dead even during that time?! Candidly, I don’t know why the market sold off yesterday, and I’m proud to say, “I don’t know.” Give me a call when CNBC interviews a guest who says, “I don’t know.” It happens about 1% of the time – and with one notable exception (Art Cashin of UBS) – I never see that guest again.
OK, I’ve gotten that off my chest. Whither the market? Candidly, once again, I still don’t know. As a matter of fact, I NEVER know. All I do know are probabilities based on thousands of hours of research that has told me what usually works in similar circumstances. Over time, that’s made a lot of money. On a single day’s basis though, anything can happen. What I know for today is that while conventional “tape action” looks pretty bad, the daily model is bullish again today. TOT daily traders come into today’s session 500% long. With a knot in my stomach, my advice is to keep the position and the stop at SPX 974. If not stopped out AND if the SPX is closing up on the session, carry your position overnight and into tomorrow. If the SPX is closing down on the session, close out your position on the close, as the prognosis for tomorrow would probably be pretty grim if we don’t go up today.
(By the way, rising interest rates do not have to be bearish for the market, although they often have been. For example, from early October 1998 to mid-January 2000, while the 10-year Treasury yield climbed from 4.2% to 6.8%, the S&P 500 gained 51% and the NASDAQ composite 173%.
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 (c) 2003 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 publisher.