Market Update 8.17.24
Our model for 7-day expected returns proved accurate within half a standard deviation for DIA and SPY. QQQ 7-day forecast was exceeded by 0.7 standard deviations, but within our acceptable tolerance of one standard deviation.
Looking forward to next week, we see an increased likelihood of choppy markets. The probability of a positive return is much lower. In some cases, it is below our nominal positive probability point of 63%. The projected 7-day changes are still positive albeit with standard deviations that reach negative territory. This emphasizes the entry window's importance in positively affecting medium-term portfolio growth.
Model outputs as of market close on 8.16.24
Whisker plot of projected changes and standard deviations.
Bar chart of probability of positive returns.
Market Alert 8.14.24
This is a mid-week market alert. The High-Probability bullish pivot window has closed. While there is still notable upside potential, the window that we define as the highest probability entry point has passed. The window opened on 8.2.24 and closed 8.13.24.
US Equity Market Directional Pivot In Progress
Looking ahead to next week, the projections for DIA, SPY, and QQQ suggest a favorable outlook with high probabilities of positive returns, particularly for DIA, which has an 85.7% probability of positive returns over the next 14 to 28 days. Relative to the model’s nominal positive probability of 63%, this is significantly higher than average. SPY and QQQ also have positive expectations, though with slightly lower probabilities of around 64.3% and 69.0%, respectively. As the week progresses the probabilities for SPY and QQQ are expected to increase. Given the current data, we can anticipate a continuation of the market's upward trend, although volatility is likely to persist as traders remain cautious ahead of key economic reports
Predictive model outputs using data through 8.9.24.
Projected returns with +/- one standard deviation.
Probability of positive returns over various time horizons.