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2017 SPX Forecast


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#1 kssmibotm

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Posted 31 December 2016 - 09:18 AM

Here is my forecast for 2017, based on past first years in the presidential term going back to 1953.  The problem with the first year of a presidential term is there have been some very good first years (1989, 1997, 2013) and very bad first years (1957, 1973).  When you average them together, you get a ho-hum forecast for 2017, which shows a mild upward bias (grey line in chart).

 

There is a silver lining though.  If you apply a simple filter to the data, the forecast gets more interesting.  It turns out that the first 5 trading days of the year provide a good early indication of how the market will perform the rest of the year.  If the SPX is positive after the first 5 days of trading, the market should experience a strong rally of 15% on average (blue line in chart).  If the SPX is down in the first 5 trading days, the market is expected to finish the year with a small loss of 4% on average (red line).  The key is where the SPX closes on Jan 9 relative to the Dec 30 close at 2238.83.  It will provide a good indication of what to expect in Trump's first year as president.

 

Happy New Year!  Best wishes for a profitable year in 2017.

 

SPX%201st%20Year%20Pres%20Term_zpsfikvlh



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#2 Praseetha

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Posted 31 December 2016 - 10:52 AM

Love your work. Thanks for sharing!


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#3 AChartist

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Posted 31 December 2016 - 03:56 PM

I like since my RUT weekly is weak for a few months it should not go too

 

far until April, I do believe in the first week indicator too.


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#4 Rogerdodger

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Posted 31 December 2016 - 04:17 PM

Looks like a nice opening pop could be sold.

I remember some of those on the 1st trading day of a new year.

 

But...

 

Mike Burk:

"Average returns for the coming week have been positive by all measures."

 

But...

 

"It is a little troublesome that the last half of December, which is usually pretty strong, was a bust."

 

 

43362_f.png

 

http://money.cnn.com...fear-and-greed/Sentiment is at 58



#5 OEXCHAOS

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Posted 02 January 2017 - 02:18 PM

November was kind of strong and probably stole some of December's thunder.

 

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#6 kssmibotm

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Posted 02 January 2017 - 03:58 PM

November was kind of strong and probably stole some of December's thunder.

Agreed.  I would not read too much into the dud Santa Claus rally.



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#7 viccarter

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Posted 03 January 2017 - 02:44 PM

yeah thanks.  i am a big fan of your analysis.