S&P500 Market Breadth Driven Short Term Forecast Starting Oct 10, 2016

By Lawrence

Review of Forecast for Oct 3, 2016

Forecast of more upside completely wrong due to multiple bearish events unfolded. Hence no blowoff top made. Swing top potentially formed the Friday before last week. The breadth analog model did a poor job last week.

Forecast Starting Oct 10, 2016

Summary of the S&P500 short-term forecast based on my proprietary market breadth analog model as of the close of Oct 7, 2016:
  • If swing top is in place, a breakdown move of 2% or more will be in store
  • Can still force a blowoff top if ES manages to make a sharp reversal on Monday
  • Swing top points to weaknesses going into late October

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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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