Bullish??

The forward forecast...with some caveats.

If you've been following the signals and the blog for the last week or so, we've had an extremely low number of historical matches for the forecast to make significant decisions with. The reason is that one of the major inputs into the system is a series of breadth-based measures. What we've seen over the past week or so is a very overbought market coupled with breadth so weak that we've had less than a handful of historical matches.

Tonight we have 8 historical matches! Not exactly something I can hang my hat on in terms of statistical significance, but it is a start. The days that did match tended to have very strong forward performance. The performance for those matches that held for one day looked really good (buy the next day at the open and exit the following open)

oAs you can see we have a bunch of 1999 in there, which was a bit higher volatility regime. But of the 8 entries 7 out of 8 were solidly positive.

​Now let's look at the 2 day holds which the main gauges above are showing the high reading based on.

Now the 3 day holds

​5 day holds

The reason I am showing the matching days is because the matching sample size is quite small and I think it helps readers get an indication of the numbers behind the forecast gauges (but usually with many more historical matches).

The bottom line is if you charts are confirming what you are seeing here maybe you add some long exposure for a trade. All I can do is show you the data. 

Have a Great Night!

​DJ