The SPX advanced 17.50 points yesterday to close at 1360.40. TOT daily traders were stopped out of our 300% short position at SPX 1354 and are currently flat.
The bond model remains neutral, and the gold model remains bearish.
The super long term perspective for the stock market remains bearish.
As I said on yesterday’s hotline, “It’s starting to look more probable that this still-young bear market is ready for a rally,” and indeed that belief is enhanced by improvements in both the long-term model (a six month perspective) and the short term model (a one month perspective). Both have upticked to bullish as of last night’s close. Repeating, both the long and short term models are now bullish.
I recorded a special intraday hotline yesterday at 3pm Eastern time stating, “all the evidence is that (the rally) is for real, and that the market should be able to continue to advance, albeit perhaps with a little retrenchment first.” The data indicate that that’s still so. By the way, for the benefit of new subscribers, on the rare occasions when I issue a special intraday update, I inform subscribers of the update via an email alert. If you would like to receive such alerts, please email me from your daytime email address the message “email alert”. My email address is firstname.lastname@example.org.
The daily model is bullish today. My concern is that very short term, the market is overextended, and therefore the choice is to buy into excessive strength (thereby increasing exposure) or to buy into a potential pullback, but risk missing the rally if it continues without a pullback. There is no perfect answer. TOT daily traders are advised to go 400% long at SPX 1354 limit or at SPX 1364 stop, whichever comes first. Use a fairly distant 20 point protective sell stop on the long position, inasmuch as a market decline today would actually enhance the probability of the daily model being bullish tomorrow. If not stopped out, carry your position overnight and into tomorrow.
Since initiation of this service on September 30, 1993, our daily trader recommendations have gained 6375.36 cumulative SPX points, compared to a gain of 901.47 points in the index itself over the same period.
Thanks for calling, and I’ll speak with you again in 24 hours.