4 replies to this topic

[kssmibotm]

It's been awhile since my last update here.  As of May 26, the SPX (yellow line) continues to track somewhere between the two forecasts shown in the chart below.  The blue forecast is based on SPX performance during the first year of the presidential term when the first five tradings days are positive.  The green forecast is based on years since 1950 when the SPX is up 5% or more in the first 33 tradings days of the year.

 

During the first two months of 2017, the SPX appeared to be closely tracking the green forecast.  However, since the Mar 1 high, the SPX has meandered sideways, and it briefly dipped below the blue forecast line in mid-May. For now, anyway, the SPX seems to be favoring the blue forecast over the green.  As such, the blue forecast suggests the next opportunity for a seasonal low is coming in mid-June to early July.  If we do indeed get a correction in that time period, then it should be bought for what could be the best rally of the year in July and early August.

 

As always, never rely on a single forecast/indicator.  Do your own analysis to corroborate this work.

 

 

 

[robo]

IWM

 

Still moving sideways since the Trump Bump....

 

[lawdog]

on the basis of pure direction, and ignoring magnitude, green seems a much better match than blue. green caught the feb advance (blue had feb drop), predicted a rather flat march, then some gains in April. i would not be at all surprised to see green continue to fairly well predict the summer direction. magnitude can take care of itself; direction is all you need to get right, unless you buy options. so, based on green, hold long to mid-july, then from mid-july, sell rallies and buy dips until october, watch out for first few weeks of oct, then hold for year-end strength. seems very reasonable.

[kssmibotm]

on the basis of pure direction, and ignoring magnitude, green seems a much better match than blue. green caught the feb advance (blue had feb drop), predicted a rather flat march, then some gains in April. i would not be at all surprised to see green continue to fairly well predict the summer direction. magnitude can take care of itself; direction is all you need to get right, unless you buy options. so, based on green, hold long to mid-july, then from mid-july, sell rallies and buy dips until october, watch out for first few weeks of oct, then hold for year-end strength. seems very reasonable.

I cannot argue with your logic for the green forecast.  However, based on independent analysis from others I follow, the blue forecast seems to be the best fit going forward.

[lawdog]

immediate question will be mid-june weakness (blue) or delay of weakness of any significance until mid-july (green); either way, the forecast shows one would do well to hold longs until first week of august, with a gain of maybe 3%, which would put spx at about 2490. judging from the difficulty we have had at 2400, I suspect spx 2500, if we get there, will be heavily defended and difficult to breach initially, which could lead, in part, to the August to mid-Oct consolidation preceding the year-end push higher.  will be interesting watching this unfold.