S&P500 Market Breadth Driven Short Term Forecast Starting Oct 17, 2016

By Lawrence

Review of Forecast for Oct 10, 2016


Forecast of 2% breakdown move was spot on. As expected, swing top formed. The breadth analog model did a perfect job last week.

Forecast Starting Oct 17, 2016


Summary of the S&P500 short-term forecast based on my proprietary market breadth analog model as of the close of Oct 14, 2016:
  • If Monday fails to clear Friday high, continuation move back down to previous week low and below likely
  • Down trend should last 1 to 2 weeks

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Report Snapshot


custom_market_breadth_20161014

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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Comments
  • ptqt October 17, 2016 at 8:58 am

    Well I must ask for guidance. I can only interpret this forecast in general ways – i.e. limited upside potential, greater likelihood of a minor correction than an upside surprise both in the week ahead as well as in the next 2 or 3 weeks ahead. Based on this data, I have no idea what to expect today and tomorrow.

    LC, you interpret it more prescriptively and with much more precision than I can see. Are your forecasts based on contextual information derived from other indications or from more detailed lookback at the analog patterns? I’m obviously missing something in my interpretation of the breadth data and I’m feeling a bit stoopid?

    • Lawrence October 18, 2016 at 2:55 pm

      The report gives you the last few occurrences of the pattern. So studying those historical charts can give you a good idea what to expect.

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