If This Isn't Turnaround Tuesday, the Bears Are in Trouble

If This Isn't Turnaround Tuesday, the Bears Are in Trouble
By Jeff Clark
November 17, 2009

Could today be turnaround Tuesday?

If you Google the phrase "Turnaround Tuesday," you'll find a surprising amount of evidence that stocks often bottom on Tuesdays after suffering extended moves lower. The script usually goes something like this...

Stocks gradually decline for several days or weeks...
Stocks suffer a decline on a Friday heading into the weekend...
The decline continues on the following Monday...
Stocks either begin to rally immediately on Tuesday, or they open lower and then turn around and close higher on the day.

Once this script plays out, stocks usually go on to rally for several weeks. In fact, this is exactly how the market bottomed in March.

But what about market tops? Can Turnaround Tuesdays signal a market peak and the beginning of a downturn? Surprisingly, you won't find much evidence on Google. All of the studies dealing with Turnaround Tuesdays were looking at market bottoms, not tops.

But it seems to me if the script works in one direction, it ought to work the other way, too.

And it does.

A recent history of stock-market peaks shows a pattern where stocks rally on Friday, hold or add to the gains on the following Monday, and then either decline immediately on Tuesday or rally a bit first then turn around and close lower on the day.

That's what happened when the market peaked in May 2008. It happened again at the peak last January. And while we haven't seen much of a correction during this current rally off the March lows, the temporary highs in September and October also occurred on Tuesdays – and were followed by 5%-7% moves lower.

That brings us to today...

The Stupidest Government Program Ever

Your Portfolio Is Loaded with Junk

Stocks are up strongly so far this month. They rallied hard on Friday and added to those gains yesterday. If this turns out to be Turnaround Tuesday, stocks will either rally early and then reverse and head lower or they'll start selling off at the opening bell. And they'll continue lower into the end of the month... or longer.

If the market doesn't reverse lower today, the bears are in real trouble. There's no such thing as "Turnaround Wednesday."

Best regards and good trading,

Jeff Clark

Extraordinary new development will push gold higher and higher
This hasn't happened in decades... and it is big.

Why Jim Rogers won't short the stock market right now
"This is one of the few times in my life I have not had shorts anywhere."

The next MAJOR government bailout
Porter Stansberry's latest prediction...

•	Mining giants BHP and Rio Tinto hit new 52-week highs.
•	Rice climbs 35% off March low... India's output drops 15%.
•	FedEx rally continues... worldwide mega-shipper jumps 17% in November to fresh highs.
•	Earnings today... Autodesk, Home Depot, Target, TJX Companies.

	Last	Change	52-Wk
S&P 500	1109.30	+1.45%	+27.03%
Oil (USO)	40.29	+2.99%	-12.75%
Gold (GLD)	111.63	+1.72%	+52.29%
Silver (SLV)	18.01	+5.01%	+92.41%
U.S. Dollar	75.37	+0.68%	-13.15%
Euro	1.49	-0.70%	+17.54%
VIX	22.89	-2.01%	-65.48%
HUI	475.53	+3.26%	+155.07%
10-Year Yield	3.33%	-0.10	-0.37

Advertisement

Company	Sym	Industry
IBM	IBM	computers
Hewlett-Packard	HPQ	computers
America Movil	AMX	telecom
American Express	AXP	credit cards
Time Warner	TWX	entertainment
Wipro	WIT	outsourcing
Canadian Natl Rail	CNI	railroads
Vimpel-Comm	VIP	telecom
Microsoft	MSFT	software
China Life	LFC	insurance
GlaxoSmithKline	GSK	Big Pharma
Roy Bk of Canada	RY	bank
Bristol-Myers	BMY	pharma
Freeport-McMoRan	FCX	copper
Infosys	INFY	outsourcing
Newmont Mining	NEM	gold mining
Duke Energy	DUK	utilities
BHP Billiton	BHP	mining
Total	TOT	Big Oil
Itau Unibanco	ITUB	bank
McDonald's	MCD	fast food
Medtronic	MDT	medical devices
Goldcorp	GG	gold mining
Kimberly-Clark	KMB	toiletries
Tenaris	TS	steel
Deere	DE	farm machinery
HSBC	HBC	bank
Banco Santander	STD	bank
Merck	MRK	Big Pharma
Banco Bilbao	BBV	bank
Novo Nordisk	NVO	pharma
BNSF	BNI	railroads
DIRECTV	DTV	satellite TV
Illinois Tool Works	ITW	machinery
Kellogg	K	packaged foods
Royal Dutch	RDS	Big Oil
Telefonica	TEF	telecom
Rio Tinto	RTP	mining
United Tech	UTX	conglomerate
Colgate-Palmolive	CL	toiletries
Texas Instruments	TXN	semiconductors
Costco	COST	warehouse store
Danaher	DHR	conglomerate
CSX	CSX	railroads
BP	BP	Big Oil
Coca-Cola	KO	soft drinks
Unilever	UN	packaged goods
Amazon	AMZN	online shopping
Altria	MO	cigarettes
Emerson Electric	EMR	electrical equip
National Grid	NGG	utilities
ADP	ADP	payroll
Adobe Systems	ADBE	software
Google	GOOG	online search
Novartis	NVS	Big Pharma
Statoil	STO	oil & gas drilling
Walt Disney	DIS	entertainment
SPDR Gold	GLD	gold fund
DuPont	DD	chemicals
FedEx	FDX	shipping
Dominion Res	D	utilities

Company	Sym	Industry
AGA Medical	AGAM	medical devices
Leap Wireless	LEAP	wireless telecom
A123 Systems	AONE	electrical equip
South Financial	TSFG	bank
Lightbridge	LTBR	synthetics

Weekend Edition: The World’s Most Expensive Oil
November 14, 2009

How to Know When the Stock Market Has Finally Peaked
November 13, 2009

These Are Classic Signs of a Rally Losing Steam
November 12, 2009

We'll Never See $50 Oil Again
November 11, 2009

Your Portfolio Is Loaded with Junk
November 10, 2009