The SPX declined 14.79 points yesterday to close at 1093.88. TOT daily traders were on the sidelines for the session and missed the carnage.
Since initiation of this service on September 30, 1993, our daily trader recommendations have gained 8312.65 cumulative SPX points compared to a gain of 634.95 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.
The long term model remains bearish, and the short term model remains ever so slightly bullish.
On yesterday’s hotline I said, “Preserving capital is always more important than adding to capital, and the risk of going long here is just too great.” I had no idea at the time I wrote that last night how prescient it would become. Yesterday was a very nasty session indeed.
I also said yesterday, “My gut feeling is that… the rally will be very short lived, and the market will reverse to the downside fairly soon.” Taken out of context, that sounds brilliant, but in reality, I was shocked at how very quickly the rally ran out of steam and reversed to the downside. I’m delighted we weren’t long, but very candidly, I did not expect yesterday’s sharp decline.
In any event, the daily model is blissfully neutral today, and it will be a pleasure to stand aside again and wait for clearer signals before reentering shark infested waters. I do not believe that any meltdown is imminent, but on the other hand, a lot of damage was done yesterday (a sharply lower session despite pretty decent news), and it will likely take some time for the market to build legs here.
Thanks for the opportunity to be of service, and I’ll email you again in 24 hours – or sooner if circumstances warrant.
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