MarketTrak Question/Comment Message

Posted By: Peter   Date: Sun May 3, 2009

Title: Cycle Analysis

  It seems the Cycle Analysis is predicting a large drop of over 1200 points in the Dow Industrials in the next 20 market days. Is that the way to read the chart and what percent probability can be attached to the forecast?

  My studies show that cycle analysis does not do a particularly good job predicting the magnitude of the change but does predict the direction of the change with about 68 percent accuracy. By direction, I mean the forward slope computed from the next five closing values.

 This analysis is still experimental and will remain so until all of the validation studies are completed. If it turns out that the model does not meet our requirements, we will remove it from our forecast page.

Sunday Update:
  We updated the parameters for the cycle analysis. This set is slightly less accurate than the previous set but produces a more realistic prediction of the trend over the next 20 days.

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