The SPX advanced 9.17 points yesterday to close at 1364.12. TOT daily traders took a 3 point scalping loss on 3 units on the short side, and then went 300% long late in the day at SPX 1365.50. We have carried that position over night and into today.
The bond model remains neutral. However, it is weakening and close to downticking. The gold model remains bearish.
The super long term perspective for the stock market remains bearish.
However, both the long and short term models remain bullish.
The market has some interesting cross currents right now, both in conventional indicators, as well as in my proprietary component indicators. Conventionally speaking, the lack of volume, the lack of buy programs, the balance between advancing and declining stocks among the most active stocks, and softening MACD patterns are negatives. Conventionally speaking, the excellent breadth well after the normal January effect has ended, the continuing strength in NASDAQ indices even when negative news is announced on individual NASDAQ stocks, and the excellent ratio of new highs to new lows are definite positives. More significant to me, several really superb component indicators of my daily model are extremely bullish. TOT daily traders come into today’s session 300% long. Go an additional 200% long at SPX 1366 stop. That will bring us to a maximally bullish 500% long. Use a sell stop on both the existing and the new position — if taken — at a distant SPX 1340. That’s a lot of risk for a lot of potential. How much potential? The SPX has the potential to rise to the 1420 level, or about 55 points, within the next two weeks if no serious negative news develops. I’ll discuss that potential further, in relation to the Fed’s Wednesday’s announcement, on tomorrow’s hotline.
Since initiation of this service on September 30, 1993, our daily trader recommendations have gained 6369.75 cumulative SPX points, compared to a gain of 905.19 points in the index itself over the same period.
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