The SPX advanced 6.12 points yesterday to close at 841.44. TOT long term and short term investors were long for the session. TOT daily traders were on the sidelines for the session as our buy limit was not reached.
Since initiation of this service on September 30, 1993, our daily trader recommendations have gained 7163.21 cumulative SPX points compared to a gain of 382.51 points in the index itself over the same period.
The super long term perspective for the stock market remains bearish.
The long term model remains bullish. However, the short term model has aborted its buy signal and has downticked to bearish. Repeating, THE SHORT TERM MODEL IS NOW BEARISH.
While the market acted well yesterday in not retreating after two big winning sessions, the oversold condition has abated significantly, sentiment has risen quickly, yet a great number of the components of the short term model have not improved at all. Take away “oversold” and “excess negative sentiment”, and what you’re left is… well, not very much. It looks like we’ll have a full blown test of the lows. The long term model is telling me that that test will hold, but that still leaves the potential for a 5-8% selloff first.
The daily model is modestly bearish today, and if we get to resistance around 850, I’d want to take a modest short position. TOT daily traders are advised to go 100% short at SPX 848 and an additional 100% short at SPX 853. Use a 15 point protective stop on each position, calculated separately. If not stopped out, carry your position overnight and into tomorrow.
Thanks for the opportunity to be of service to you, and I’ll email you again at an appropriate time sometime during today’s trading session.
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