S&P500 Short Term Market Breadth Analog Forecast Starting May 9, 2016
By Lawrence
Review of Forecast for May 2, 2016
Sell-off week as expected. Initial rumor driver short squeeze made the drop of 2% from week high not enough to break the 1.5% down from previous week close level. Hence 2.5% down not materialized. Volatility picked up as expected. The breadth analog model did an excellent job for the week.
Forecast Starting May 9, 2016
Summary of the S&P500 short-term forecast based on my proprietary market breadth analog model as of the close of May 6, 2016:
Sideway week expected
Range bounded within 1.5% both directions likely
Weak close will lead to very steep selloff the week after
Intraday volatility compression for imminent breakout
Very similar to the week leading to the 2015 Aug selloff
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.
S&P500 Short Term Market Breadth Analog Forecast Starting May 9, 2016
Review of Forecast for May 2, 2016
Sell-off week as expected. Initial rumor driver short squeeze made the drop of 2% from week high not enough to break the 1.5% down from previous week close level. Hence 2.5% down not materialized. Volatility picked up as expected. The breadth analog model did an excellent job for the week.
Forecast Starting May 9, 2016
Summary of the S&P500 short-term forecast based on my proprietary market breadth analog model as of the close of May 6, 2016:
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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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