The SPX advanced 21.47 points yesterday to close at 2043.41. Turov on Timing daily traders were on the sidelines for the session. Interestingly enough, the SPX, the DJII, and the Nasdaq 100 all closed lower than where they were at 10:45 a.m., the Nasdaq by a significant amount. The Russell 2000, however, closed about .6% higher on the close than its 10:45 price, probably indicating bargain hunting in the beaten down secondary stocks.
Since initiation of the Turov on Timing service on September 30, 1993, our daily trader recommendations have gained 15931.33 cumulative SPX points, compared to a gain of 1584.48 points in the index itself over the same period. That’s a ratio of 10.05 to one. (Please note that any day in which the daily model fails to outperform the SPX by at least a ratio of +10.05 to one, since that’s the ratio of outperformance already achieved, that ratio will decline.)
(The commentary in this paragraph last updated November 5, 2015) The super long term perspective (i.e., it’s a prediction, not a forecast!) 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 expect that our new 2016-elected President will have some very serious problems during his or her single term in office.
(The commentary in this paragraph last updated December 8, 2015.) The Intermediate Term Model is bearish. Despite December’s traditional strong record, it is quite possible that the highs for 2015 have already been reached.
Yesterday, I sent out an email to you, asking, “About half of Turov on Timing subscribers are either brokers or advisers, and the other half are just as sophisticated! So I’m very curious what you think. Your comments will NOT affect my recommendation for tomorrow (which, at present, I have no idea what it will be), but if you can take a moment to answer the following question, I would appreciate it. THANKS! On Wednesday, I believe the stock market will advance/decline in response to the Federal Reserve’s raising/not-raising interest rates.”
I was pleasantly surprised at the large number of responses I received. Thank you! Here are the results: 77.5% think the market will rise after the announcement, while 15% think it will decline, and 7.5% had no opinion. 70% think the Fed will raise interest rates, 12.5% think they will not, and 17.5% either had no opinion or said it didn’t matter. Although I rarely offer my opinion on such matters, relying instead on my models (in a moment), I think the Fed will raise interest rates, and the market will end the day lower than where it was at the time of time of the announcement, a decidedly minority opinion on direction. I expect a lot of volatility as the announcement is made (which just about everybody anticipates), which will include a spurt upward, and then followed by profit taking. If, unexpectedly, the Fed decides not to raise rates, I would expect a down move initially, followed by a rally which will fail, and then a further decline. In my opinion, the least likely event will be a big advance after the announcement; if the market advances through the close (which, as I have indicated, I don’t expect), I think it will be modest.
The news-neutral (how unrealistic is that?!) daily model is bearish today although the news-neutral index models are solidly bullish in the 10:45 – 4:00 period. However, both the SPX and the DJII both look soft on the index model in the early going. But realistically, the news at 2:00 is so important that both of these news-neutral models may be measuring the unmeasurable.
TOT daily traders are advised to go an unleveraged 100% short at SPX 2040 stop or at the market at 9:45 a.m. if 2040 is not reached by then. The reasons for the unleveraged position are (1) the fact that today will not be news-neutral and (2) I expect a lot of volatility and I do not want to use a stop.
Thanks for the opportunity to be of service, and I’ll update again later today.
Turov on Timing is Copyright © 2015 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 including the fact that past performance is not a guarantee of future performance. 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.