S&P500 Short Term Market Breadth Analog Forecast Starting Apr 13, 2015

By Lawrence

Review of Apr 6, 2015

Monday gap down capped by 1% drop and it led to a mega run all the way back up to +1.5% from the prior week close. Forecast from last week nailed this precisely. The breadth analog model did an excellent job again.

Forecast Starting Apr 13, 2015

Summary of the S&P500 short-term forecast based on my proprietary market breadth analog model as of the close of Apr 10, 2015:

Upside capped at around 1% with strong downside risk.
Once the downside move exceeded 1.5%, the scenarios for a move down to 2.5% will become likely.
Whole setup is staging for another sell off (similar to what happened in early March) in 2 to 3 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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