S&P500 Short Term Market Breadth Analog Forecast Starting May 23, 2016

Review of Forecast for May 16, 2016

Trend sell week as expected. Initial push higher due to news shock immediately reversed course as breadth not supporting the move at all. End of week option expiration actions took S&P back up to previous week close. Dow reached the swing target zone mentioned in MBO Special Update. The breadth analog model did a good job for the week.

Forecast Starting May 23, 2016

Summary of the S&P500 short-term forecast based on my proprietary market breadth analog model as of the close of May 20, 2016:

• Signs of custom market breadth catching up to the selling but nowhere near a selling climax
• Down trend intact
• MBO Special Update this week will focus on what to do next
• Intraday volatility expansion likely going into coming 2 weeks

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Report Snapshot

Short Explanation About The Model

My market breadth based analog model takes into account the short term volatility, daily market breadth readings and a few other intraday breadth data to identify the current market conditions. Using the information, the model then went through the historical data over the past 20 years to generate its statistical analysis. The model has been pretty good at identifying important swing tops and bottoms over the past few years by providing early warnings about potential volatility upticks.

For the technical explanation of the concept, you can read about it here, Market Breadth Primer: Market Breadth Analog Forecasting Method

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