The SPX advanced 1.54 points yesterday to close at 1114.35. The daily model had predicted a “modest rise,” and that’s exactly what we got. TOT daily traders were on the sidelines for the session.
Since initiation of this service on September 30, 1993, our daily trader recommendations have gained 8292.65 cumulative SPX points compared to a gain of 655.42 points in the index itself over the same period.
The super long term perspective for the stock market remains bearish, and it’s unlikely anything will change that for several years.
Both the long term and short term models remain bearish. Some components of the short term model are surprising me with their strength, and their bearishness is certainly moderating. However, subscribers should note that such internal improvements (or deterioration) in the model has happened many times previously, only to see them reverse, keeping the model exactly where it was before. So short term traders should not rush to cover the short position they took back on April 9 just yet.
Yesterday was a day of the market following the news. It opened weak because Merrill Lynch revised its recommendation on the global semiconductor sector to “underweight” from “overweight,” saying it believed the shares offered no upside from current levels, and MER specifically downgraded Intel. Late in the day, gasoline futures (along with other petroleum futures) took a sharp price hit, and in response, the stock market reversed its losing ways. It will be an interesting sidelight to tomorrow’s market what happens with both Merrill Lynch and Intel as both of them are scheduled to report earnings!
The daily model is neutral today, which is somewhat better than I had expected. Odds are that the market will simply follow the news trail, similar to what it did on Monday. Continue to stand aside, awaiting a fatter pitch.
Thanks for the opportunity to be of service, and I’ll email you again in 24 hours – or sooner if circumstances permit.
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