Future stock market predictions

Future stock market predictions

Author: tvt Date of post: 12.07.2017

Politics, global instability, Greek Crisis, overvalued U. For those who argue that past performance does not guarantee future results, I agree, there is no guarantee. But a statistically significant model result can predict the future, much like how weather forecasters can predict the weather fairly accurately for the next 10 days. After 10 days, the predictions become less accurate but still can give a rough figure based on climate models. The stock market is in a sense a little like weather, a collection of chaos.

Instead of using wind shear , sentiment is used. Thus, we should be able to predict the stock market to some degree. And the basis of technical analysis is the study of patterns.

As they say, "History repeats itself. On January 4, , I wrote an article calling to prepare for a fall of at least In the article, I gave a Dow NYSEARCA: SPY target of 2, ; a NASDAQ NASDAQ: NDAQ target of 5, ; and a Russell NYSEARCA: IWM target of 1, As shown in the graphs of the major indexes below, all four indexes overshot their respective targets a month or two ago before pulling back last month.

Could markets be finally due for a pullback? Is "sell in May and go away" coming in April? Are there fundamental and technical warning signs? The Dow seems to be forming a head and shoulders pattern. Technical trader Thomas Bulkowski states that the head and shoulders pattern is one of the best indicators of a market reversal.

Futures - Bloomberg

The price target is 18,, a decline of Of course, the target could change when the neckline is completed. This would nearly take the Dow back to the day of the election, erasing most of the Trump Rally. Assuming a symmetrical head-and-shoulders pattern, the price should hit its target in about months. The price target is 2, , a decline of Again, the target could change when the neckline is completed. Assuming a symmetrical head-and-shoulders pattern, the price should hit target in about months.

The price target is 4, , a decline of This would take the NASDAQ back to the January of lows. The Russell also seems to be forming an enlarged head-and-shoulders pattern. The price target is , a decline of This would take the Russell below its January of lows. Reagan was elected on November 4, After the election, stocks were range-bound till April 1, Stocks then started a slow decline of In the November election, stocks soared for about four months, were range-bound for about a month, and could start a slow decline starting around April 1, Trump and Reagan share many similarities.

Reagan's platform called for cutting taxes to boost economic growth, using tariffs to protect American jobs but supporting free trade , and cutting regulations to decrease the size of government. Does this sound familiar? He opposed the Voting Rights Act, but extended it after pressure from Grass Roots.

He also pledged to abolish the Department of Education, but he " did not pursue that goal as President.

future stock market predictions

A draft for renegotiating NAFTA seems to point that Trump now only wants to make small changes to the treaty. If Trump gets impeached , gets acquitted, or resigns due to investigations into his Russian ties and other legal issues including a lawsuit , which is a big IF, what will happen to the stock market? There has been only one impeachment in U. Bill Clinton was acquitted on December 19, , since the Senate could not reach the required votes to impeach him. The August 8, , resignation of Richard Nixon was technically not an impeachment, but it was very close.

Created from Stock Data. Besides Trump, the seasonal " sell in May and go away " is coming up. The phrase refers to the seasonal pattern that stocks perform statistically worse from May 1-October 31 than from November 1-April This could be caused by an annual slowdown in business activity, such as how companies would tend to buy up semiconductors for Christmas season, and then since they would have excess inventory after Christmas, they would buy less semiconductors till the next cycle.

The pattern could also be caused by people selling stocks to pay for summer vacations. And only mid-term election years since have "an average decline in the May 1-October 31 period, with an average decline of 0. In the latter period, there were two months with average negative performance vs.

It seems that even if the market rises or falls from May-October, it will end the period nearly flat or slightly negative. A more effective strategy may be to avoid the months of February, May, and September and maybe October. Fellow Seeking Alpha contributor Fortune Teller briefly mentioned the "sell in May and go away" pattern and highlighted key events that could cause the market to fall. He also emphasized that the Shiller PE Ratio shows that the current bull market is one of "the most expensive in history.

As can be seen, the ratio is just slightly below where it was on Black Tuesday just before the Great Depression. It is interesting that when researching the Crash of , I concluded that large influxes of capital by banks and billionaires in an attempt to stabilize the market just made the matter worse. That makes me think that the more the Chinese government floods capital into its market to stabilize it, the worse it may get.

Stock market outlook for - Business Insider

If a depression hits China, ripple effects would be felt around the world. The United States may have also come very close to another Great Depression if the country continued QE quantitative easing.

Thus, I think it would be wise to not trigger QE4. But I would argue that a U. A recession is defined as two consecutive quarters of negative GDP growth.

The last recession was in , and the nation has averaged a recession every 5 years since with an average GDP contraction of 2. Fourth quarter GDP growth came in at 2. Estimates for first quarter GDP growth fell to 0. If the pace of declining GDP growth continues, GDP growth could hit negative like in the first quarter of , , and Since the pattern seems to be every three years, could GDP growth fall below zero in the first quarter of ?

And from the chart below, the market seems overdone for a decline. The debt limit was breached on March 15, , but the Treasury can use " extraordinary measures " until mid to keep the country from defaulting on its debt.

The government shutdown and possible default lowered the country's credit rating and caused a The bigger issue seems to be the ongoing Greek Crisis. And on March 19, the Wall Street Journal warned, "At 2. Treasury note on Friday exceeded the 1. GLD may be a good hedge against a decline, that way an investor would have enough cash to buy stocks at their lows.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it other than from Seeking Alpha. I have no business relationship with any company whose stock is mentioned in this article. Summary Technicals show a potential head and shoulders forming.

Macro View , Market Outlook. Want to share your opinion on this article? Disagree with this article? To report a factual error in this article, click here. Follow Michael Bryant and get email alerts.

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