The SPX declined 40.7 points yesterday to close at 1741.89. TOT daily traders went 200% long on Friday’s close and took a loss on the position yesterday at SPX 1758. Normally, I hate stop orders, for reasons explained in the February monthly Turov on Timing, distributed late Monday, but yesterday was one of those relatively rare occasions when having a stop did help.
Since initiation of the Turov on Timing service on September 30, 1993, our daily trader recommendations have gained 13830.40 cumulative SPX points, compared to a gain of 1282.96 points in the index itself over the same period. That’s a ratio of 10.78 to one. (Please note that any day in which the daily model fails to outperform the SPX by at least a ratio of 10.78 to one, since that’s the ratio of outperformance already achieved, that ratio will decline. In an advancing market it will therefore almost always decline, and in a declining market it will almost always advance.)
(The commentary in this paragraph last updated December 13, 2013) The super long term perspective for the stock market remains bearish (as it has been since January 2000 after having been bullish for over 25 years, from December 1974 until then). I continue to expect the market to suffer more pain before the primary bear market is over, some years in the future (best guess: 2017 or 2018), at or below about the same Dow Jones 11,000 area as it traded in January 2000, after probably hitting new (temporary) highs in 2014. I expect to see our new 2016-elected President to have some very serious problems during his or her term in office.
(The commentary in this paragraph last updated February 4, 2014) The Intermediate Term Model is bullish. So far, the current Intermediate Term Model reading has been disappointing.
Numerous times in December, I said, “While, as expected, the market has reached the SPX 1800 neighborhood, I expect to see SPX 1750 before 1850.” I’ll take half credit for that forecast since while the SPX briefly traded above 1850, it never closed above 1850, while yesterday’s close was clearly below 1750. On the other hand, I won’t pretend that I expected to market to crash on the first day of February, one of the historically strongest days of the year.
The full-day daily model is bearish today, a rather unusual occurrence on the second trading day of the month. However, since all of my index models are bullish for the early part of today, and most are bearish for the 10:45 to 4:00 period, the most likely trading pattern today would be strength in the early going, followed by additional selling later. TOT daily traders are advised to go 200% long at SPX 1742 stop; 1744 limit. For those not familiar with stop-limit orders, that means IF the SPX advances to 1742 or higher, THEN try to go long at SPX 1744 or better. Note that it is NOT a simple SPX 1744 limit order. (If it were a simple SPX 1744 order, then an opening at SPX 1738, for example, would trigger a purchase. That is NOT the case with the stop-limit order.)
If and when you go long, we are risking 5 points to make 5 points. So sell the position at a limit 5 points above where you go long, or on a stop 5 points below where you go long, OR at the market at 10:45 a.m., whichever of those three events occurs first.
Regardless whether you go long or not, and then regardless when you sell such long position, at 10:45 a.m., go 200% short at the market. Once short, use a 10 point protective buy stop on the position. If still short as we approach the close, I’ll update with a closing recommendation sometime between 3:45 and 3:55. If not still short, I’ll update about 24 hours from now.
Thanks for the opportunity to be of service, and I’ll email you again as per the prior paragraph.
Turov on Timing is Copyright © 2014 by Turov Investment Group Inc. All rights reserved. Turov on Timing is for personal use only. All caveats and advisories that appear in the monthly Turov on Timing apply equally to this email. Re-publication and distribution is strictly prohibited. No part may be reproduced without the permission of the Turov Investment Group Inc. All recommendations are based on the Standard & Poor’s cash index (SPX) which cannot be directly traded and Turov Investment Group Inc. makes no recommendation or suggestion to readers as to how SPX-based recommendations should be traded but rather leaves that to the discretion of each individual reader. The “official” price of the opening and closing SPX is as reported at www.bigcharts.com and may not be consistent with futures or ETF prices. All stop recommendations are based on that “official” price. Any recommendation that is to take place at a specific time is basis the “opening” on a one minute bar chart beginning at that time and ending one minute later. All times mentioned are Eastern. Questions related to this service should be directed to InvestmentAdvice@aol.com.