This is Turov on Timing for Wednesday, June 30, 2010
The SPX declined 33.33 points yesterday to close at 1041.24. TOT daily traders came into the session 200% long and sold that position at SPX 1046. We then went 200% short at SPX 1047 and covered that position on the SPX 1041.24 close. We are currently flat.
Since initiation of the Turov on Timing service on September 30, 1993, our daily trader recommendations have gained 11995.11 cumulative SPX points, compared to a gain of 582.31 points in the index itself over the same period. That’s a ratio of 20.60 to one.
The super long term perspective for the stock market remains bearish (as it has been since January 2000 after having been bullish from December 1974 until then). I believe that the current cyclical bull market probably has further to go before topping out, most likely in 2012, but not necessarily at significantly higher levels than at present. However, as a caveat, I must add that current evidence for that belief is paltry.
The Intermediate Term Model remains bullish, but it is holding on to that reading by the narrowest of margins. I expect it to turn bearish after a brief rally from current oversold levels.
The following chart, courtesy of my friend, David Weis, shows that the SPX has formed an almost perfect head and shoulders top – but very significantly, it has not broken the neckline. I’m not much of a fan of conventional technical analysis, but a head and shoulders is one pattern with significance. If the neckline is broken, it is enormously bearish. However, if the neckline holds, it can be almost as bullish. The obvious problem is we don’t know which will occur.
Today is the final day of June. Final days of months are historically bullish, but June considerably less so than most months.
The daily model is neutral today. However, my NASDAQ model, which breaks the day down into component parts, is modestly bullish for the morning, but it is bearish for the afternoon. TOT daily traders are advised to go 200% long at SPX 1042 stop or at SPX 1036 limit, whichever comes first. If neither level is reached by 10:15, consider the recommendation cancelled. If you go long, use a 1% protective sell stop on the position until 10:15. At 10:15, reverse the position completely by selling the long (if not previously stopped out) and simultaneously going 200% short. Use a 1% protective buy stop on the short position.
I believe that the H&S neckline will hold for the balance of the week, barring more scary news (and who ever knows that?), but that the market is on perilous ground. —- Thanks for the opportunity to be of service, and I’ll email you again at 3:50 – or sooner if circumstances warrant.
Turov on Timing is Copyright © 2010 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. Re-publication and distribution is strictly prohibited. No part may be reproduced without the permission of the Turov Investment Group Inc.