Palisades Research - Daily Stock Market Forecast

We give individual probabilities and ranges based on the S&P500 and Nasdaq100, each uses different criteria and so the values can differ, they are most reliable when the probabilities are both in the same direction. * means insufficient data.. **Means the signal was unstable near the close and not as reliable.. *** Means avoid.

This is a forecast not a recommendation. Read our comments for our current positions.

Programs for 2024

We have six managed programs. Over time these programs will not move together with the market as they are their own independent asset class. Any of our programs will provide diversification to stock, bond or commodity investments that you will not be able to get with standard asset classes, as most asset classes now tend to move together. All of our programs uses a different level of market exposure so they can balance risk in all but the smallest portfolio. Each program has different characteristics so that we can match the needs of the risk adverse investor as well as investors seeking high growth. Select Our Investment Programs for Program details and management fees.

Since they use different algorithms and have a different focus they will operate independently from each other, providing true diversification from the market trends. The positions that are shown each day in our comments are the actual positions we have taken for our accounts ( we tell you that before the trading day starts).

#1: Primary Long/Short/Money-market. (Daily market exposure varies, overall about 28% less exposure to market than index.) Designed for those investors looking for overall better than market gains with less than market risk. Running since the start of 2006.

#2: Long/Money-market only. (Market exposure varies, overall about 50% less exposure to market than index. Does not go short.) More traditional approach, but it is only exposed to the market under ideal conditions. Running since the start of 2012

#3: Very Conservative Retirement program. (Does not use leverage. Overall only exposed to the markets at a rate of 40% as much as the NDX. For those who can not afford to take large risks, but still want better than money market gains. Running since the start of 2012,

#4: Hot Money program. The program can be leveraged as much as two times, but overall carries the same amount of exposure risk as the NDX.) For investors that can afford risks similar to that expected in the market but are looking to maximize gains over the long term with strong diversification Running since the start of 2012.

#5: SuperAlgo, (High Exposure / (high risk especially short term), high expectations program). This program was introduced just after the presidential elections. During more normal market environments this program should greatly outperform the markets in both up and down environments. During disruptive events where abnormal conditions prevail the program could under perform. Since it does take advantage of time based diversification the effects of most disruptions should be short lived. It is expected to greatly outperform during times of higher volatility. Most of the time this program is fully leveraged at 2X. Running since 11/08/2016.

#6: Anticipatory Trend program. The program has evolved to following the SuperAlgo program with a limited amount of leverage 1.2x applied only to the "long" positions while the "short" positions move at 1x. This reduces the program's exposure to the market by about 10% less than the market itself. Running since the start of 2017.

All of our programs are designed to reduce overall draw-downs, while targeting larger long term gains. We do reduce our market exposure under higher volatility conditions to try to maintain more even daily changes and reduce the size of down days.

Anticipatory Trend

Our proprietary method of trend analysis does not wait for the trend to form but anticipates it. Anticipatory trends will be either UP, DOWN or NEUTRAL. In early 2012 we flushed out the anticipatory trend to make much greater sense of the markets. As a result, on average with an "UP" Trend you should expect a high probability for the markets to go higher, strong, for the next day and then drift higher for the next week. Up trends are often interspersed with neutral days, but the markets should go higher. With a "Down" Trend you would expect a high probability for the markets to go lower, strong, for the next day then drift lower over the next next week. Down trends are often interspersed with UP trend days but the markets should work their way lower when the bulk of the days call for Down. When the signal is Neutral we have an expectation of more erratic behavior, with probabilities for the next day leaning slightly lower, but then strong gains over the following month. These trends will generally move between a flat and trending direction. It is important to be able to tell when the trend actually changes direction. Viewing the signal over a number of days provides additional market information.

Feedback loop

February 2016 we introduced a feed-back loop to move the programs to the money market during turbulent random markets. It checks how well the market is following the anticipatory trend. When the market diverges from the trend it is usually due to immediate outside forces, news events and overnight- overseas surprises. When the number of these divergences becomes too great the divergences themselves can influence the market in additional unexpected ways adding another level of complexity to the normal market behavior and reducing the probabilities of the next daily forecast. Though in most cases the reliability remains positive over the long term, the behavior becomes more random and the risk reward ratio falls below our cut off level. By moving to the money market it allows the market time to return to more normal behavior.

Market Structure

Our Market Structure programs surveys a group of our trend components over a period of days to establish an overall level of market strength. This consensus becomes an oscillator and tells us where the market is longer term. It does not use price directly so it is unlike a moving average that tells you what you already know. The Market Structure Level tells us what the most likely market direction will be for coming near term and the likelihood of rallies or market drops persisting. The Market Structure Level can remain positive or negative for many months at a time. As the Market Structure level becomes more positive it uses energy and we find that the day after a positive step the market shows weakness. As the level falls the market gains strength and the following day is often positive for the market.

Market Volatility

The least utilized and probably best indicator for the buy and hold investor is the level of market volatility. This can be easily measured by measuring the amount the markets move regardless of the direction of the move. When the daily changes are small, investors get encouraged as investing seems safe so they invest more. When the markets get more wild (in either direction) Investors become more fearful and start to sell off their holdings. The markets move more under large daily change markets but in total go nowhere long term as large gains and drops tend to cancel each other out. It is in the "small change" markets where gains greatly outshine the dips. We can see that behavior even when our Market Structure is negative, as small daily change markets have done well under all conditions.

By continually working on improvement we are able to remain on top of the markets. This enabled us to continue to make strong gains during the market crash in 2008. The program's capabilities have greatly improved over the past 16+ years as it learns from new data and we learn from our experience. These are the same programs we use to manage our accounts.

free T-Index software

Read our Daily Comment: We tell you our positions and market expectations a day in advance. We have provided the daily forecast continuously since Nov. 17, 2000.

Signals for the S&P500 & NDX posted after 3:00 pm Pacific time (two hours after the close) for the next trading day.

Our program, using no-load index funds is designed to work under all market conditions and has done so, in actual trading with real money, for the past 14 years. Over this time frame we have greatly out performed the markets, with lower draw downs than the markets, dispelling the theory that trading always involves high risk. The forecast (above) is for the next market day only. The probability chart shows the probability and expected amount of the move (explanation). Watch these forecasts, you will need patience because we only trade when we believe we have a high probability of being correct. We are in the market, on average about 4 days per week, the rest of the time we are safe in the money market. Sometimes we are only partially invested. The program was developed to keep risk at a minimum and to produce large gains. This program measures "investor emotion" and "inter-market money flow"--it took thousands of hours and a number of years to develop. The program is capable of learning and adapts to new market conditions.

These are real transactions, not hypothetical calculations. Our real-money transactions are made using no load Rydex 2x strategy Mutual funds. The active aggressive (2x) account moved between the Rydex S&P 500 2x strategy fund, Inverse S&P 500 2x strategy and money market. As of June 12, 2003 they also included the Rydex Nasdaq 100 2x strategy and Inverse Nasdaq 100 2x strategy funds. Our program uses signals generated a few minutes prior to the market close in order to place the trades with Rydex, our daily comments will let you know exactly what we are doing.

There have been a number of improvements to the program since inception in August of 2000. The program learns from experience and has now digested a bear market as well as the prior bull run and has provided a good deal of protection for us during this severe down-turn. We are Registered Investment Advisors.

If you would like us to manage your account using this very program, see our Investment Programs.

Please do not trade these signals on your own. We are not responsible for any losses that may occur.

Visit us often and watch our progress. Be sure to read the Daily market Commentary every day. When we say LONG in our comments it means we expect the market to go up and have purchased the Rydex [S&P 500, Nasdaq 100 or Russell 2000] 2x fund. When we say SHORT it means we expect that the market will go lower and have purchased the Rydex Inverse [S&P 500, Nasdaq 100 or Russell 2000] 2x fund (which move opposite to the market), and when we say Money Market it means we do not have enough information for an informed decision and have moved into the Rydex money market. This is a very sensible way to invest. Take a look at our investment programs.

You must remember there is always risk of loss when investing. Past performance is not a sure indicator of future performance.

With the trowel of patience, we dig out the roots of truth.

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French Proverb