The SPX advanced 12.78 points yesterday to close at 1051.33. TOT daily traders had a breakeven on a day trade.
The super long term perspective for the stock market remains bearish.
The long term model remains neutral, and the short term model remains bullish.
Yesterday, TOT daily traders went 400% long at SPX 1042 stop. At 12:30 Eastern time, I issued a special intraday hotline in which I said the following: “Throughout today, my intraday model has shown no positive divergence when the market has been pulling back, and it has shown modest negative divergence when the market has been advancing. This means that the so-called smart money is not buying the dips and to a modest extent is selling the advance. This smart money is by no means always right, but unless there are lots of other good indicators that justify defying their judgement, it is wiser not to. I would not want to go short, inasmuch as the daily model is bullish, but being long is rapidly becoming riskier than I would like. TOT daily traders went 400% long at SPX 1042 this morning. As I write this, the SPX is about 1044. Raise your protective sell stop up to a breakeven level of 1042.”
Indeed, we were stopped out at 1042, and the SPX then declined all the way to 1035. At about 3:00, with the SPX at about 1035, I noticed the beginnings of some positive divergences. Such divergences, to be meaningful should last for at least 15 minutes and preferably 30 before they have a high enough probability to be significant, and had they continued I would have issued another special report. But then a buy program hit the market and it started to surge. The problem with trading along with a program is that you never know how big the program is and how far it will last. So I stood aside and watched the market rally strongly into the close on the basis of that program.
By the way, when I recorded the 12:30 special hotline, I informed subscribers by email that there was such a recording. Several messages were returned to me as being bad addresses. If you did not receive an email from me, then either you didn’t give me your address or the one you gave me no longer works. To get on the free list, email me at email@example.com
The directional component of the daily model is bullish today. Risk remains high. At the onset, we will stay on the sidelines. If the SPX trades down to the 1240 area and there’s positive divergence on my intraday model, I’ll issue another special report and I’ll send out emails to that effect. But unless that happens, we’ll stand aside.
Since initiation of this service on September 30, 1993, our daily trader recommendations have gained 6603.09 cumulative SPX points compared to a gain of 592.40 points in the index itself over the same period.
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