This is Turov on Timing for Wednesday, September 27, 2006.
The SPX advanced 9.97 points yesterday to close at 1336.34. TOT daily traders were on the sidelines for the session.
Since initiation of the Turov on Timing service on September 30, 1993, our daily trader recommendations have gained 8928.68 cumulative SPX points, compared to a gain of 877.41 points in the index itself over the same period. That’s a ratio of 10.18 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.
The long term model remains neutral, and the short term model remains bearish.
If I had to guess what’s propelling the market higher, my guess would be that the brokerage firms are trying to push the Dow into record new high territory so as to bring back more of the public. If that’s an accurate assessment, expect to see it continue for a while more. Also, I’d be surprised if there were not a rash of new buy recommendations on the Dow stocks over the balance of the week.
The market is showing massive negative divergence on some of my more important indicators, signaling the likelihood of a significant selloff once this current push is over. But without knowing if my “guess” is right, and even if it is, without knowing how much capital the brokers are willing to throw at the blue chips, it’s impossible to predict a top. But it’s no accident that the Dow Industrials outperformed the SPX yesterday which outperformed the NASDAQ which outperformed the Russell 2000. If my sinister view of the brokers is correct, they would logically throw funds towards the most visible index first (the Dow), and then the others in terms of their visibility.
In any event, if you want to go long, go with the Dow. But officially, we will stand aside until “normalcy” returns.
Thanks for the opportunity to be of service, and I’ll email you again six hours before the start of tomorrow’s trading session – or sooner if circumstances warrant.
Turov on Timing is Copyright © 2006 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.