Last month the title for my stock market forecasting entry was also "Bouncing Back" and that was certainly not the case for the lousy stock market September we just got through!
But, this blog and my stock market prediction models focus on the coming six months, not the next few weeks. Take a look at the stock market performance versus prediction graph below. The model had been expecting seasonal weakness for the late summer and that is what occurred, just worse than forecast. If my macroeconomic model is to be believed, it says that the market is over reacting to international news and things should start to get better over the next few months.
(Click on image to enlarge.)
So here is my 6-month forecast:
U.S. Stock Market Forecast (Value Line Arithmetic Index):
Probable stock market gain 10/1/2015 to 4/1/2016: 10% (Avg. 6 mo. gain since 1984: 4.8%)
Probability of at least breaking even : 85% to 90% (Average for all months since 1984: 73%
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