Market Forecast: S&P 500 Index
The market forecast chart looks for price action periods that are similar to current conditions in the S&P 500 Index. Specifically, we look at 45-day time periods from the past, with each starting and ending using the same dates. We scan these time periods, over 30 years, looking for any periods with strong correlations with current conditions. Typically 1 – 5 historic time periods will closely match the price action in the current year. These historic time periods are then normalized, weighted, and combined together to form an index for the underlying market. We then use the historic performance of the index, 30-days out, as a forecast for possible price moves for the market. This forecast is not intended to generate specific buy-sell recommendations … but rather to identify possible key reversal points and/or extended trends.
Market Forecast Chart Highlights:
- The green line represents an index of historic data that closely tracks the current underlying market. It consists of two phases both using the same green line but separated by the vertical tan area. Phase one (shown left) represents the 45-days of highly correlated index data with current conditions. Phase two (shown right) represents the 30-day forecast based on the historic performance of the index.
- The data used to construct the index and its level of correlation with the current price data is listed on the second header.
- The tan vertical bold line represents the run date for the chart and distinguishes between historic and forecast data.
- The black line represents the current price data over the past 45-day.
- The orange line represents the extension of the 30-day forecast normalized to the current price data. Note the orange, forecast line, will mirror the extension of the green index line. They both reference the same data, the only difference is their starting point.
Market Forecast: S&P 500 Index
Signals are NOT buy/sell recommendations. Our information is strictly provided for educational purposes only. As always, trade at your own risk and analysis.
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