The S&P 500 (SPX) declined 1/4 point yesterday to close at 1197.26. TOT daily traders came into the session 200% short, went an additional 100% short at SPX 1199, and were stopped out at SPX 1207, effectively giving back half of last week’s gain.
Since initiation of this service on September 30, 1993, our daily trader recommendations have gained 8580.05 cumulative SPX points, compared to a gain of 738.33 points in the index itself over the same period.
The super long term perspective for the stock market remains bearish, and it’s unlikely anything will change that for several years.
Both the long and short term models remain bearish.
The good news from yesterday is that the daily model was correct, especially when considering the bullishness of the Greenspan news. The bad news – obviously – is that we were stopped out of our position and took an unpleasant loss. As I have said often in this hotline, I hate stops, believe that in the long run they cause far more losses (through whipsaws such as yesterday’s) than they prevent (through runaway markets), and that whenever possible I avoid them for personal trading. Yet, from experience I know that when I don’t recommend using them, I lose subscribers – and in the long run, that’s bad for both me and for subscribers.
The directional component of the daily model is bearish today, but the risk component is very high. That pushes the overall model into neutral, and we will therefore stand aside.
Furthermore, I know for a fact that the risk component of the model will be in the “too high” range on Thursday also, and inasmuch as I will be traveling tomorrow, I will not publish a Turov on Timing tomorrow. And although it’s extremely probable that the risk component will be high enough on Friday to keep the overall model in neutral, I WILL publish again six hours before the start of Friday’s trading session.
Thanks for the opportunity to be of service, and I’ll email you again in 48 hours.
Turov on Timing is Copyright (c) 2005 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.