The stock market forecasting models documented here are based on the premise that the broad U.S. stock market tends to do approximately what it usually tends to do. Over a forecasting horizon of six months the market will respond to the same real economic factors that have moved prices over the past several decades. Shocking, right?
In late August through September the stock market was panicked by fears of things that don't have large real dollars and cents impact on the U.S. economy (financial uncertainty in China and Greece along with weak world oil prices). My models had expected typical seasonal market weakness, but not the extra downdraft of international finance fears. Then, just like the not-at-all-real goblins of Halloween, in October those extreme fears fell away and the market staged a sharp recovery.
Over the long haul my experience-based stock market forecasting results tend to be pretty good. Or, at least they have proven to be fairly accurate since 2007 when I started publishing forecasts in real time.
Here is my 6-month forecast:
U.S. Stock Market Forecast (Value Line Arithmetic Index):
Probable stock market gain 11/1/2015 to 5/1/2016: 11% (Avg. 6 mo. gain since 1984: 4.8%)
Probability of at least breaking even : ~90% (Average for all months since 1984: 73%
Here is the track record of my 6 month stock market forecasts since 2007:
(Click on image to enlarge.)
