Market Commentaries

Review of Forecast for Apr 20, 2015

First attempt to go higher last week was capped at the 1.5% boundary as forecasted last week. Yet by mid week the selling failed to produce the strong downside risk scenario as forecasted. That in turn led to an all out rally higher into end of week. Forecast from last week got the first half of the week correct but failed to tell us the end of week scenario as the situation changed mid week. The breadth analog model did its job but it can be better if you track it daily.

Forecast Starting Apr 27, 2015

Summary of the S&P500 short-term forecast based on my proprietary market breadth analog model as of the close of Apr 24, 2015:

• Last few times this scenario happened, we get significant selling within a week
• Both upside and down side are capped at 1% this week.
• Trend sell in place for more weaknesses in coming 2 weeks.

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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