The SPX advanced 4.94 points yesterday to close at 1300.80. TOT daily traders came into the session 300% short, covered that short on the 1295.86 opening, then re-shorted very near the high for the day at SPX 1310.50 and have held the position overnight and into today. At the end of today’s message, I’ll comment on the interrelationship between the cash index and futures as pertains to yesterday’s recommendation.
The bond model remains neutral, and the gold model remains bearish.
The super long term perspective for the stock market remains bearish.
The long-term model (a six month perspective) remains neutral, and the short term model (a one month perspective) remains bearish.
While the daily model is bearish at the onset today, I don’t see a lot of additional downside potential, and a one to three day rally is a high possibility, prior to a possibly vicious downside resumption. TOT daily traders come into today’s session 300% short. Take your profit at SPX 1290 limit or SPX 1305 stop, whichever comes first. If at any time at or after 2:30, the SPX is below 1290, but above 1280, go 200% long. If you go long, use a 10 point protective sell stop. Whatever your position on the close, carry it overnight and into tomorrow.
Since initiation of this service on September 30, 1993, our daily trader recommendations have gained 6377.31 cumulative SPX points, compared to a gain of 841.87 points in the index itself over the same period.
In the October 2000 issue of Turov on Timing, I addressed the issue of the interrelationship between my cash based recommendations and futures trading. Yesterday’s recommendation gives an example of how difficult it is to make precision relationship comparisons. On the hotline, I recommended covering our short position at the market. Monday’s cash close was roughly 1296, and the futures 1310, close to a fair value 14 point spread. For our track record, we used the 1296 cash opening on Tuesday. However, during the night on Globex, after I had recorded the message, the futures traded down below 1304. Yet they opened the day session at 1316. So depending on whether someone traded futures on the night session or the day session in response to my recommendation, they either did 6 points better or 6 points worse — or somewhere in-between. For more information on the subject, see the October 2000 Turov on Timing.
Thanks for calling, and I’ll speak with you again in 24 hours.