S&P500 Short Term Market Breadth Analog Forecast Starting Oct 19, 2015

By Lawrence

Review of Forecast for Oct 12, 2015

Pullback of 1.5% capped the drop so the 2% and more decline did not materialize. Volatility uptick happened but not by much. The breadth analog model did a poor job last week.

Forecast Starting Oct 19, 2015

Summary of the S&P500 short-term forecast based on my proprietary market breadth analog model as of the close of Oct 16, 2015:

Sudden sharp pullback of 2% to 2.5% within the week potential increased
Volatility spike is expected for this week but not necessary carry into next week
Weak closing for this week will open door to sell shock the week after

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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