S&P500 Short Term Market Breadth Analog Forecast Starting Apr 6, 2015

By Lawrence

Review of Mar 30, 2015


Bounce of 1% early in the week was spot on. The continuation selling right after was also an excellent call. The breadth analog model did an excellent job last week.

Forecast Starting Apr 6, 2015


Summary of the S&P500 short-term forecast based on my proprietary market breadth analog model as of the close of Apr 2, 2015:
  • Friday NFP data sent Emini S&P lower by some 20 points but the stock market was not open, so we do not have Friday market breadth to project the scenario properly
  • A bounce of 1.5% or more is likely if the downside is capped by 1% on Monday
  • Once the downside move exceeded 1.5%, the scenarios for a strong bounce will be unlikely
  • More weaknesses expected going into 2nd and 3rd week from now

Report Snapshot


market_breadth_forecast_20150402

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
  • Minty415 April 7, 2015 at 1:37 pm

    Hi LC – Looking at the raw % from 10, 15, and 20 days out and there’s a slightly heavier weighing on the bullish expectations but overall neutral if anything, so I’m trying to understand where you are seeing the “More weaknesses expected going into 2nd and 3rd week from now”? Perhaps I’m not reading this correctly.

    Also in 20 days out how is it possible for “-2.5% or more” to be higher than “-1% or more” (27.5% vs. 21.7%) as I thought it would’ve been inclusive of that. Thanks.

    • Lawrence April 7, 2015 at 6:35 pm

      1st question: I have the composite chart which is not automated yet.

      2nd question: They are not inclusive. In short, works like market profile.

      • Minty415 April 7, 2015 at 8:37 pm

        Cool, thanks!

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