The SPX advanced 24.24 points yesterday to close at 1080.99. TOT daily traders were on the sidelines for the session.
The super long term perspective for the stock market remains bearish.
Both the long and short term models remain neutral.
After a lower opening yesterday, a massive buy program in S&P futures then created index arbitrage buy programs. CNBC reported that Goldman Sachs was engineering a massive portfolio allocation shift from bonds to stocks. Yet, if that’s accurate, why did bonds advance yesterday? I don’t have the answer, but I’ve seen CNBC reporting errors enough in the past to question the accuracy of this new reporting. In any event, it was an impressive advance that moved the SPX up to a higher level than the intraday low on September 10, the day before the World Trade Center attack. It’s hard to justify that, considering how much damage the US economy is likely to incur as a result of the attack.
The daily model is slightly bearish today. TOT daily traders should go 100% short at SPX 1279 stop. If you go short, use a protective buy stop at SPX 1191. If not stopped out, carry your position overnight and into tomorrow. Please note that this is a small position with a relatively tight stop inasmuch as the model is only modestly bearish today.
Since initiation of this service on September 30, 1993, our daily trader recommendations have gained 6622.95 cumulative SPX points compared to a gain of 622.06 points in the index itself over the same period.
Thanks for calling, and I’ll speak with you again in 24 hours.