Palisades Research

Daily Stock Market Forecast

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Daily Market Commentary

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Signal and Probability Explained:

Up Probability Average amount (up) Down Probability Average amount (down)
       

SIGNAL:

Our forecast: [ UP, Down, or OUT ], shows the position for the next trading day based upon our criteria with regard to risk, reward, and sample size:

Up or LONG means the market is expected to go up. We would have purchased the Rydex Dynamic NDX 2x Fund, or one of the other index funds.

Down or SHORT means the market is expected to go down. We would have purchased the Rydex Inverse NDX 2x Fund, or one of the other "inverse" index funds.

OUT or CASH means we do not have sufficient reason to take a position and we purchase the money market fund.

Each day, if the signal changes from the day before, we close out the old position and replace it with the new one.

Probability:

The UP Probability box shows the % of time the S&P500 has risen under similar conditions of investor emotion and money flow.  The Average amount (up) box shows the average amount in % that the market went up, when it did go up.

The Down Probability box shows the % of time the market dropped under the same conditions and the Average amount (down) shows the average size of the drop for those days it actually went down.

Expected Amounts:

The "Average amounts" are adjusted for the current volatility, providing a more accurate prediction for the size of the average expected move.  These probabilities are based upon ten years of data and usually reflect a sample size of at least 30 related cases.  These are average moves. The extremes are also very important because they show the potential risk associated with the transaction. We do not post those figures at this time.

Each day is a new opportunity.