The SPX declined 1.34 point yesterday to close at 1180.18. TOT daily traders were on the sidelines for the session.
The super long term perspective for the stock market remains bearish. However, both the long and short term models remain bullish. I’ll have another comment on these models in a moment.
At Wednesday’s closing price, the daily model is neutral. However, if the SPX rises to 1199, TOT daily traders should go 300% short. Use a 10 point protective buy stop on the position if you go short. If not stopped out, carry your position overnight and into tomorrow.
The relatively bullish news from Microsoft after the close yesterday has the potential to propel the market up sharply this morning. I’d expect a strong opening, followed by a selloff, followed by a second rally which exceeds the opening strength. My best estimate is that the pros will fade that second rally, rather than follow it. Whether or not the second rally holds within a few points of the first rally’s high will be the first good clue as to whether this market can grow some legs. If the market cannot advance today, both the long and short term models will probably downtick, and we might see a rather classic selling panic. The market has had no good news lately, and if it is to advance, it must show the ability to capitalize on the Microsoft news. I’m skeptical that it can do so with any authority at the precise present moment. I expect to see the market close up on the day, but lower than 1200.
Since initiation of this service on September 30, 1993, our daily trader recommendations have gained 6475.75 cumulative SPX points compared to a gain of 721.25 points in the index itself over the same period.
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