S&P500 Short Term Market Breadth Analog Forecast Starting Feb 8, 2016

By Lawrence

Review of Forecast for Feb 1, 2016


Potential swing top setup materialized. Limited upside and downside was correct based on the previous week boudnaries but the expected 1.5% limit was off. Volatility continues to pickup as expected. NFP report produced a flush low and the potential for a surge higher for this coming week is still something to be observed. The breadth analog model did a good job for the week.

Forecast Starting Feb 8, 2016


Summary of the S&P500 short-term forecast based on my proprietary market breadth analog model as of the close of Feb 5, 2016:
  • Potential bounce from a flush low due Monday
  • Upside potential limited around 1.5-2% for the week
  • Continuation to the downside on daily basis may happen before next week is over
  • Volatility expansion is expected to continue

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Report Snapshot


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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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