The SPX advanced 1.83 points yesterday to close at 1097.28. TOT daily traders went 300% short at SPX 1093.40 and have held the position overnight and into today.
Since initiation of this service on September 30, 1993, our daily trader recommendations have gained 8289.50 cumulative SPX points compared to a gain of 638.35 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 term and short term models remain bearish.
If one allowed oneself the SIN of being emotional about the market, then yesterday was a very pleasant ride in the morning, and a shocking disappointment in the afternoon. On the other hand, if one evaluates the market rationally, yesterday’s swift recovery was VERY typical of bear market bounces, as over-leveraged pyramiding short sellers, using trailing stops, got stopped out on the first sign of a rally, and then the momentum players and program traders rush in to cover their shorts and bargain hunt. Volume was not significant enough for the early day’s selloff to be considered climactic, and the odds strongly favor the late advance being visually impressive but technically insignificant as a predictive event for future sessions.
The directional component of the daily model is bearish today, as expected, and the dramatic volatility yesterday has caused the risk component to move into very high territory. In the absence of unexpected (and unknowable) news, I’d expect to see the market move up slightly above 1100, play with that century market for awhile, and then move lower.
TOT daily traders come into today’s session 300% short. Maintain the position, but move the buy stop up 2 points to SPX 1105.40. If not stopped out, carry the position overnight and into tomorrow.
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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