The SPX advanced 9.61 points yesterday to close at 1373.73. TOT daily traders came into the session 300% long and then went an additional 200% long at SPX 1366. We have carried that position overnight and into today.
On yesterday’s hotline, I forewarned that the bond model was weakening. Indeed, the bond model has downticked from neutral to bearish. Repeating, the bond model is now bearish. The gold model remains bearish.
The super long term perspective for the stock market remains bearish.
However, both the long and short term models remain bullish.
The daily model is bullish today, but I expect volatility around the Fed’s announcement to make trading exceedingly difficult. Unofficially, conservative traders might want to consider taking profits and moving to the sidelines. However, officially, we will follow the model and retain our 500% long position, but move the protective sell stop up to SPX 1365. If not stopped out, carry your position overnight and into tomorrow.
My best guess — and it’s just that; a guess — is that the Fed will lower rates the expected 50 points, and the market will start to sell off. Then it will stage a solid rally into the close. But virtually anything can happen, and real risk is stratospheric
Since initiation of this service on September 30, 1993, our daily trader recommendations have gained 6414.04 cumulative SPX points, compared to a gain of 914.80 points in the index itself over the same period.
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