This is Turov on Timing for Wednesday, November 15, 2006.
The SPX advanced 8.80 points yesterday to close at 1393.22. TOT daily traders went 200% short at SPX 1387 yesterday morning and covered the position at that same price yesterday afternoon.
Since initiation of the Turov on Timing service on September 30, 1993, our daily trader recommendations have gained 8887.84 cumulative SPX points, compared to a gain of 934.29 points in the index itself over the same period. That’s a ratio of 9.51 to one.
The super long term perspective for the stock market remains bearish (as it has been since January 2000), and it’s unlikely anything will change that for several years.
Both the long and short term models remain neutral.
To say yesterday was an interesting session would be an understatement. The first hour of trading had the widest trading range of any declining first hour in many months, after having gap opened higher and then selling off, yet the market rebounded smartly from that selloff late in the day with a powerful half hour rally in which the Dow advanced almost 100 points. CNBC’s Bob Pisani attributed the spurt to program buying, and it certainly did seem to have that flavor.
While November is historically a strong month, that strength is generally concentrated near the month change and Thanksgiving periods. Indeed, one would have to go back for more than three decades to find an options expiration week in which the market advanced consecutively on Monday, Tuesday, and Wednesday. Well, it has gone up Monday and Tuesday, and an advance today would be rather unusual.
The daily model is neutral today, but I do expect the early going to be soft. Officially, TOT daily traders will stand aside, but unofficially, nimble traders might well consider shorting any early morning carry-through strength, and holding the short with a tight trailing stop. But, as I said, officially we are neutral and will stand aside.
I might add that if the market is able to sell off modestly today, it will likely set the stage for an assault on SPX 1400 before the week is out. The odds of the daily model being bullish tomorrow, Thursday, are rather high.
Thanks for the opportunity to be of service, and I’ll email you again in 24 hours – or sooner if circumstances warrant.
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