Stock Market Forecast November 2016 thru April 2017: No Gain

The new 6 month stock market forecast from the model  (November through April, 2017) is for zero gains and a slightly below average chance of just breaking even.  The models know nothing about the upcoming presidential election, so it should be no surprise if the next half year proves to be volatile.

I have a correction to make in last month's market prediction.  A data error caused the model to project a 6 percent loss for the stock market.  Corrected, the forecast for next March is for no net gains.  Please accept my apologies.

As seen in the chart below, for the last year or so the market has followed the same general direction as my forecasts made a half year previously.   As is typically the case with models such as mine, the actual market moves tend to be somewhat greater -- both up and down -- than the model expected. And, that's OK.  The goal of the model, after all, is to foretell the basic direction of the U.S. stock market, not to be fully accurate.  There is much too much volatility in the world for a simple mathematical model like mine to be anywhere near exact.

(Click on image to enlarge.)

The last call of the short term trading strategy was negative.  It will take some positive forecasts for that to turn around.

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Stock Market Forecast October 2016 thru March 2017: Negative

Just when I thought my forecasting models were starting to look up, the predictive market models models have turned decidedly negative.  For the next 6 months the models project that there will most probably be a loss of about 6% and only about a 50/50 chance of at least breaking even -- well below the 73% historical average of breaking even in any random 6 month stretch.

My negative forecast, of course, doesn't mean the market must go down. The forecast means only that if the market responds to the same influences that have tended to drive it for the past three decades, then it probably will face real (but, hopefully not too scary) difficulties.

Since, my forecast is neither extremely negative or positive, it wouldn't surprise me if, for the next few months, outside events, such as the presidential election overshadowed the sorts of economic realities that define my forecasting models.

(Click on image to enlarge.)