MarketTrak Question/Comment Message

Posted By: Steve   Date: Sun Mar 6, 2011

Title: Oil

  As you stated on your forecast page, oil is driving the market today. Do you include this variable in your model input?

  Oil prices are not explicitly included in our model input. We do include the CRB index which includes crude, heating oil, and unleaded gas. These three make up about 33 percent of the index.

 The turmoil in Egypt and Libya happened almost overnight and resulted in large increases in oil prices. Our model missed the subsequent market decline because the data leading up to all this was normal. Having oil prices explicitly in our model would not have changed our forecast.

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