My models expect another month of weak results for the U.S. stock market, but then things should get back to normal. For September, the models see a likely stumble of less than half a percent -- no big deal. For the next half year the models predict a net gain of about 5% (slightly better than the average gain of 4.8% since 1984). Surprisingly, the models see the probability of at least breaking even as 98%.
(Click on image to enlarge.)
The forecasting models have been very accurate so far this year. (Better than my long term testing would have expected.) The graph below shows, month-by-month the actual gains of the Value Line Arithmetic Average (black) and the results for the same period that my models had predicted 6 months earlier (red).
(Click on image to enlarge.)
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