Predictive Model Output - Dec 16, 2005

[nodoodahs]

After this week's action I'm still doubtful we'll close above 1280 this year. Maybe we'll cross that as an intraday high, but I wouldn't be hopeful.

The short-term moving averages are starting to diverge, but in a bad way - the 10 and 15 day are moving down while the 5, 20, 25, and 30 day averages are parallel. Volume is up but the direction of the typical price is down over the last couple of days. 10 day average money flow indicator is below 50. The KST indicator line is above the signal line, but is moving down into it.

On the flip side, the EPCR model is edging up higher into the 3rd decile. While the 20 day EPCR average is more bullish than it's been in a while, the 100 day EPCR average is not very much changed. Meanwhile our 21-day return has been exceptional. All told, the model output is in the 3rd decile, after crossing over from the 2nd decile early this week. The difference between 2nd and 3rd decile readings is basically less downside and more upside, but a similar median and average return of less than 1% over the next 21 days.

Still planning to add advance/decline to the EPCR model but haven't found the time yet.

The 13-week model for the S&P 500 has a 7th decile reading for the fourth consecutive week. A 7th decile reading would suggest median and average returns of 2.9% for the next quarter, with greater than 65% chance of gains, 50% chance of above-average gains, and 2% chance of ending the quarter down more than 10% from where we are today.

The 52-week model for the S&P 500 has fallen to the 5th decile, after having a 6th decile reading for three consecutive weeks. The 5th decile is low to neutral in the sense that it suggests a slightly below average 52-week return. Median and average returns for this reading are close to 9%, with 77% chance of gains, only about 44% chance of above-average gains, and a relatively hefty 12% chance of ending the year down more than 10% from where we are today.

The 13-week model for the 10YT is way down in the 1st decile, and has been for seven of the last eight weeks including the last six in a row.

The 52-week model for the 10YT is down in the 3rd decile, and has been for ten weeks in a row. I don’t know if I believe that the yields will get below 4%, but that is the model output, still looking for lower yields in the medium to long term.

The 13-week model for the USDX has is in the 5th decile for the second week.

Weird. The 52-week model for the USDX pops into the 7th decile, after having fallen from the 6th to the 5th decile last week.
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I haven’t seen a beatin’ like that since somebody stuck a banana in my pants and turned a monkey loose.

[nodoodahs]

Three days this week, three readings in the 4th decile, each higher than the last.
_________________
I haven’t seen a beatin’ like that since somebody stuck a banana in my pants and turned a monkey loose.

[nodoodahs]

Crossed into the 4th decile with today's close. Getting close to reenter for you short-term market timers ...
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I haven’t seen a beatin’ like that since somebody stuck a banana in my pants and turned a monkey loose.