November 2017: 2% one month expected increase (unusually strong)
Likelihood of at least breaking even: 80% to 95% (75% is average)
These stock market forecasting models remain bullish with surprisingly high projections for the coming month. The probability of at least breaking even is again considerably higher than average. The Trump tax package could well falter and might take a bit of air out of the market. Beyond that the models still see no major mid-term threats to this bull market.
Personally, I expect November to be volatile since the GOP income tax bill is expected to be announced tomorrow. Whatever form it takes there will be possible winners and losers. That should translate into stock market volatility.
I, however, will be a sure winner in the tax battle. The flow of new lobbyists to Washington is going to be amazing. There is nothing like the possibility of tax changes to get the K Street crowd hiring -- not just the lobbyists themselves with their money sacks. They all get backed up with lawyers, accountants, analysts, consultants and IT staff. The airlines, hotels, restaurants, and hookers all will do great business as all the greedy or scared interest groups come to town for "vital" meetings. Once started, tax wars go on for years and years. The market value of my DC house is gong to take a great leap! Thanks guys!
The graph below shows the S&P 500 from 2007 with colored points overlaid to show the forecasts the models generated in real time. Note that each point does NOT indicate what already happened in the market, rather each is the forecast for the 6 months that will follow the forecast. Look at the 6 months following each point to see if the forecast was on track.
Click on image to enlarge.
