An absolutely horrid day for both the market and for TOT daily traders as the SPX declined 22.48 points yesterday to close at 1608.90. TOT daily traders went 300% long at SPX 1623 and took our lumps on the close. We are currently flat.
Since initiation of the Turov on Timing service on September 30, 1993, our daily trader recommendations have gained 13709.11 cumulative SPX points, compared to a gain of 1149.97 points in the index itself over the same period. That’s a ratio of 11.92 to one.
(The commentary in this paragraph last updated June 6) The super long term perspective for the stock market remains bearish (as it has been since January 2000 after having been bullish from December 1974 until then). Since February 12th, I’ve said that I expect the 2009-2013 cyclical bull market to end in “Spring 2013”. It is too soon to know whether the May 22nd intraday high of 1687.18 marks that end or not.
(The commentary in this paragraph last updated June 6) Intermediate Term Model comment: The “wave” of trading that brought the market to new highs is unlike any pattern that has appeared during the 21st Century. It was unlike the blowoffs in either 2000 or 2007 or, for that matter, like anything else. To quote Art Cashin on CNBC in May: “This is a very different kind of market than we’ve ever seen.” The selloff since the May 22nd intraday high of 1687.18 does not negate those comments, but it is possible that the high of this bull market has already been seen.
Historical similarity (of limited statistical use, but certainly interesting): Only once during the 21st Century has a pattern similar to this week’s pattern occurred in June. That was in 2007, during the week of June 4. Monday of that week saw the SPX advance 2.84 points, followed by declines on Tuesday and Wednesday of 8.23 and 13.57 points. That up, down, down pattern has been repeated this week with the SPX up, down, and down. In 2007, the net decline from Monday through Wednesday was 18.96 points; this week it is 21.84 points. Because the market is about 80 points higher now than then, the percentages are virtually identical. On the Thursday of that week in 2007, the market continued its slide with the SPX falling 22.66 points.
Unrelated to the preceding, as I stated two days ago was preliminarily the call, the daily model is bearish today. However, I expect the Russell and NASDAQ indices to fare much worse than either the SPX or the Dow. A morning “pop” after Wednesday’s selling would not be a surprise, and I’m going to wait until I see Thursday’s action before making any recommendation.
Thanks for the opportunity to be of service, and I’ll email you again in a few hours.
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