Predictive Model Output - Dec 9, 2005

[nodoodahs]

The S&P 500 doesn’t look nearly as overbought as it did two weeks ago, but I don’t expect any charge ahead until after the new year starts. The EPCR measures are slightly more bearish long-term (and less bullish short-term) over the last couple of weeks, and we’ve consolidated gains. However, the output for this model is still in the 2nd decile (well the extreme top edge of the 2nd decile) so again, it looks like 1280 is not very likely for the end of the year and 1270 is less than a 50/50 chance.

On a lighter note, if you hear anyone on the news say that the Santa Claus rally has already come, remember you heard that here a week ago.

Henry dug up some historic advance/decline data for me, and I’m gonna see if it responds as well to the EPCR short-term model as the S&P 500 index does. Likewise on my list is to try and adapt it to the NASDAQ 100 or DJIA, but that’s a lower priority for me.

The current EPCR model is posted here, it's the same model I've been posting results here since sometime in August was its last tweaking. http://nodoodahs.blogspot.com/2005/11/current-epcr-model.html

The 13-week model for the S&P 500 has a 7th decile reading for the third 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 a 6th decile reading for the third consecutive week, neutral in the sense that it suggests an average 52-week return. Median and average returns for this reading exceed 11%, with 80% chance of gains, greater than 50% chance of above-average gains, and a relatively hefty 13% chance of ending the year down more than 10% from where we are today. The moderate correction I anticipated is here, and I expect us to be flat for a little while longer.

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

The 52-week model for the 10YT is down in the 3rd decile, and has been for nine 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 back into the 5th decile, and has been vacillating between the 4th and 5th deciles for the last few weeks.

The 52-week model for the USDX has also fallen from the 6th to the 5th decile. These models were much more bullish for the dollar a couple of months ago.
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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]

4th day in the 3rd decile and three in a row higher than the last. This is still fairly ho-hum, kinda sideways indication for the index.

MFI for 10, 50, and 200 day have converged. More evidence of sideways action. Moving average volumes for 5, 10, 15, 20, 25, 30 day all converging. The shorter-term MA for typical price have converged.

I'm not sure if today's candle is a "bearish dark cloud cover" or a "bearish meeting lines." Anybody have a clue?

I'd be surprised if we close the year above 1280 and don't think today is a good entry point for the overall market.
_________________
I haven’t seen a beatin’ like that since somebody stuck a banana in my pants and turned a monkey loose.

[nodoodahs]

EPCR model has moved into the 3rd decile with today's close.
_________________
I haven’t seen a beatin’ like that since somebody stuck a banana in my pants and turned a monkey loose.