Market Commentaries

Overview

Emini overnight range 1859.75 up to 1907.50

Overnight Midpoint 1883.50

Previous Week Midpoint 1896.25

Emini S&P is now trading at the top part of its range with gap up of almost 30 points.

 

Battleplan for the Day

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Review of Forecast for Jan 11, 2016

Monday did not produce a flush down of 2% thus the 2% upside was not in play. Custom breadth did not reverse, so we did not get the rally of 3.5% or more. A bounce was produced but not the correct type. The breadth analog model did a fair job for the week.

Forecast Starting Jan 18, 2016

Summary of the S&P500 short-term forecast based on my proprietary market breadth analog model as of the close of Jan 15, 2016:

• Slingshot flush down of 2% and quick squeeze back up 2% is possible on Monday (or Tuesday due to US holiday on Monday)
• Bottom out on breadth basis will kick start a rally of 3.5% and more

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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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Mid-day Update: I posted back in the beginning of the year on what to expect from the bearish start in Emini. Here is an update of the chart.

It is clear that once Emini S&P failed to hold the tighter down channel, it moved swiftly down to the 100% expansion target. It then bounced strongly today from the higher timeframe channel support.

Bragging time here – screenshot of my real-time commentaries this morning.

What to expect next?

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