*** PREDICTION for the Next Trading Day:
For Tuesday we say: “There has been some strengthening, although nothing overwhelming, and our indicators remain just slightly above the Neutral range. The Market Timing Indicator (MTI) is Neutral at 1.0000, and our Market Assessment (BNB) indicator is also Neutral. On the other hand, our neural networks suggest a positive bias, and our long-term (mutual fund) signals continue to chug along in the BUY state. We expect a 'hold' or better for Tuesday”.
*** SCORING of Previous PREDICTION:
For Monday we had said: “The market appears to be a bit weaker, and that could spell trouble for us, but most of our BUY signals remain in place – at least for Monday. The Market Timing Indicator (MTI) remains Neutral (at 1.0000), while the Market Assessment (BNB) indicator is currently 'slightly Bullish'. Our long-term (mutual fund) signals remain in the BUY state also, and our Short Strength Indicator (SSI) suggests that we are currently nowhere near shorting territory. For the moment, this market continues to look safe for Long investments. For Monday we think that the market will at least 'hold', but has a slightly heightened risk of declining a bit.”
How did we do? The Forecast for Monday was obviously way too conservative – since we had only projected a 'hold' (or slightly loser) – but the important fact was that our signals stayed in the BUY state and thus our trades did well.
*** Note: 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