The SPX declined 2.78 points yesterday to close at 2639.44 in a day that saw the market fall precipitously after a very strong opening. TOT daily traders went 200% long at SPX 2650 and took a small loss, closing the position at SPX 2645.
Since initiation of the Turov on Timing service on September 30, 1993, our daily trader recommendations have gained 17518.17 cumulative SPX points, compared to a gain of 2180.51 points in the index itself over the same period. That’s a ratio of 8.03 to one. (Please note that any day in which the daily trader recommendation fails to outperform the SPX by at least a ratio of +8.03 to one, since that’s the ratio of outperformance already achieved, that ratio will decline.)
(The commentary in this paragraph last updated August 1, 2017) The super long term perspective (a prediction, not a forecast!) for the stock market remains bearish (within the context of a medium term bull market). I believe that, adjusted for REAL inflation (not the funny numbers the Social Security Administration uses) the stock market may be lower in real dollars in 2020 than it was in 2000, although higher in nominal dollars. For a long time, I’ve been saying, “I also expect that our new 2016-elected President will have some very serious problems during his/her single term in office.” That belief stands, and we see it happening already.
(The commentary in this paragraph last updated November 6, 2017) The Intermediate Term model remains bullish. The odds favor the market drifting higher UNTIL something bad and unexpected occurs – and that can be tomorrow or three years from now. There have been LOTS of reasons for the market to decline over recent months, but it has remained stoically resistant to declining. I would much rather be bearish than bullish — because the market seems to be significantly overvalued — but the model disagrees (primarily as a result of continuing and historically low interest rates).
While the Dow kept some of its early gains yesterday, and the SPX was down only a small amount (although both were down a lot from their highs), the Nasdaq index really got hit hard, falling 1.17%. Tech stocks were hit especially hard. I noticed in Alex Eule’s column in this week’s BARRON’S that 64% of the world’s memory chips are produced in South Korea – so while markets remain rather sanguine about the North Korean nuclear threat, a war there, which the Eurasia Group puts at a 20% possibility in the Eule column, would slow worldwide technology growth significantly, with repercussions in many other industries, as well, no doubt.
Yesterday had all the flavor of a bearish reversal, but the daily model is bullish today. I NEVER take a position contrary to the daily model but I sometimes override it. Today is one of those days. Stand aside.
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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