This is Turov on Timing for Thursday, November 13, 2008.
Wow! I finished the research I described to you yesterday morning (duplicate copy of that email available on
request), and I’m astounded at what a difference the risk adjustments make. I use the word “astounded” for three
1. I expected that the adjustments would impact not only the risk component of my models but some of the component
directional signals themselves. But it was a surprise how many of the component directional signals were affected
by the factors described in yesterday’s email, and by the magnitude of their influence.
2. Before describing the following, let me assure readers that I neither “curve fitted” nor “data mined” prior to
arriving at the following. I simply input the appropriate raw data and let the computer generate the answer. And
the answer is that with the adjustments described yesterday, the Intermediate Term Model would not have turned
bullish on September 25th. Indeed, it would have been bearish from September 11th to the present. Furthermore,
both the SPX and the NASDAQ models would have been far more bearish on most days since then. The intraday model
would not have been impacted.
3. Considering how “wrong” the unadjusted models were, I’m astounded (to use that word again) at how very, very
well TOT daily traders and all managed accounts have actually done compared to the overall market over the past two
months, outperforming it by a wide margin. Candidly, we would have made a fortune had I (a) been aware of the
leverage factor discussed in the November monthly report, and (b) appreciated the implications of that factor, as
discussed yesterday. I have more faith in my models, particularly the NASDAQ model, than ever before, and of all
the reasons that “astound” me, I’m most astounded by this reason – how well we’ve done despite the Intermediate
Model’s being dead wrong for two months! It bodes very well for the future now that the issue described yesterday
has been fully integrated into the daily model, NASDAQ model, and Intermediate Term model.
That having been said, this is one sorry looking market. From a conventional perspective, especially with futures
down overnight on the Intel news, and considering how close we are to a triple bottom in the market, I would expect
the market to break support this morning, trigger lots of stops which the “smart money” will buy up, and then stage
a smart rally. But the last thing in the world I ever do is take a “conventional perspective.” Why? Because, in
my experience, it has no more chance of being right than a coin toss.
What my NASDAQ model is saying is that if the NASDAQ 100 cash Index is down in the morning (i.e., fails to bounce
back from the expected lows), then there is a 61% probability that the market will fall further, and that even if
the market advances in the morning, there is a 59% chance that the advance will not hold. But I do want to see how
the intraday model looks before making any recommendation. AND REMEMBER: A 60% probability of winning still means
there is a 40% probability of losing. On any given day, those aren’t overwhelming odds. Over time however, if you
can get odds anywhere close to that, you’ll make a fortune. And that’s what I expect to see happen (Disclosure: Not
guaranteed, risk involved, etc., etc.).
I’ll email you again, regardless what the market does in the morning, between 10:45 and 11:00 a.m. Thanks for the
opportunity to be of service.
Turov on Timing is Copyright © 2008 by Turov Investment Group Inc. All rights reserved. Turov on Timing is for
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