*** Market Timing Indicator:
The Market Timing Indicator (MTI) is at 1.0000 (equal to the neutral value), signaling a very weak continuation of our uptrend -- at best. The probability of further losses, however, has clearly now increased ... although we don't yet see sure signs that the uptrend has been actually broken. We have an ORANGE Market Color Code for Friday, indicating an unusual degree of uncertainty as to market direction.
The MTI can range from about -2.5 to +2.5, with a 'neutral' value of 1.0. A value of 1.0 will generally be associated with a market that is either stable (holding its valuations) or rising slowly and erratically. Values greater than 1.0 signify a 'long' market, while values substantially below 1.0 (and especially zero or negative) signify shorting situations. Although the MTI is extremely useful (especially in the construction of equity-specific models), bear in mind that it has a reaction time of several days. It is thus not sufficient to use this indicator alone for trading specific equities on a day-by-day basis.
*** PREDICTION for the Next Trading Day:
For Friday we say: "Our MTI (Market Timing Indicator) remains at its neutral value (1.0), and we now have an ORANGE Market Color Code -- our 'anything can happen' color. More of our signals have gone to Cash for Friday, and the number of Shorting signals is beginning to increase also. We expect that the market will 'at best' hold near current valuations on Friday, but it is more likely to slide a bit further. Semiconductors (SMH) 'may' do relatively well, however".
*** Scoring of Previous PREDICTION:
For Thursday we had said: "Our MTI (Market Timing Indicator) has been kicked back to the neutral value (1.0), which essentially tells us very little. On the other hand, our short-term neural networks suggest that the market retains some strength, suggesting that a meltdown is not yet upon us. A substantial number of our signals remain in the BUY state, with a somewhat greater number in Cash, and with very few Shorts. In particular, ,our key ETFs are predominately still Long, and only the Russell 2000 looks shaky. We actually expect that the market will rebound somewhat on Thursday, but at the very least it should 'hold' -- although as we mentioned, small-caps may remain vulnerable to some additional losses".
How did we do? The Forecast for Thursday was incorrect, of course. The market did indeed attempt to rebound, but nonetheless ended up essentially flat in the Dow (DIA), and with moderate losses in both the 'techs' and the small-caps. So, we got some aspects right, and some wrong. Our AAPL signal has proven to be very accurate in recent days, however, and after successfully shorting it today we are going Long with it for Friday.
Schulenberg 2X-Hedged IWM (^IWM2)