The SPX advanced 5.58 points yesterday to close at 890.81. 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 7484.80 cumulative SPX points compared to a gain of 431.88 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 neutral, and the short term model remains bullish.
On yesterday’s hotline, I said, “In the absence of negative news, and with the short term model bullish, I’d expect to see the SPX reach at least 900 by the end of this shortened week.” As I write this message, S&P futures on Globex are already trading at 902, equivalent to a cash index level of about 903. So, that prediction has been met.
Now for the bad news. The daily model is solidly bullish today. However, with the futures indicating a cash value more than a dozen points over yesterday’s close, and with the risk component of the model very high, I simply wouldn’t want to take the risk. Short term traders (i.e., followers of the short term model — who have been long for some time) should stay long, but the risk to daily traders (who usually use much more leverage than short term traders (they are primarily mutual fund switchers) should stand aside as the presumed morning gap has simply made the risk too high.
Thanks for the opportunity to be of service, and I’ll email you again in 24 hours.
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