INDU Mean Model Projections:
The INDU near term mean model is giving a projection of a top and heading down 250 points over the next 20 days before finding support. The projection model has a backfit correlation of >99% with market. It also has a >99% backfit correlation with the present mean model.
Right now, the market is about 1.2% above the near term mean model. The market mostly makes turns after above 2.5%. Larger turns occur above 5%. Larger market turns will occur slightly before or after the present mean model has turned.
The INDU intermediate term mean model is giving a projection of a slowing rise over the next 6 months, with a hint of a market top forming in July / August this year. The long term mean model also has >99% backfit correlations.
Right now, the market is about 2.1% above the long term mean model. The market mostly makes long term turns above 2.5%. Larger turns occur well above 5%.
What does this all mean?
The mean model is a combination oscillator / statistical indicator. The market trades above and below the model. When the market is at some percent difference from the model, and the model is calling for a turn, buy/sell signals are generated. Catching the big turns are much more likely when near and intermediate mean models are synchronized, much like multiple degrees of e-waves or cycles. Projections will change slightly over time since the market is dynamic. The projection 6 months from now will be different than the 3 month projection 3 months from now. It is a general direction compass point, not a pinpoint laser.
Forecast:
Over the next couple days there should be a pop of 300-400 points, followed by a drop of 1000 points in the market. The move should be a corrective e-wave since the long term mean model has not topped, AND the market is not sufficiently above the mean model. The e-wave pattern I'm looking for over the next 6 months is waves 4 and 5 of an ending diagonal.
Daily near term mean model projections starting Monday January 9.
12082.92582
12077.7306
12072.40577
12066.99416
12061.538
12056.07878
12050.65704
12045.3122
12040.08241
12035.00439
12030.11325
12025.44236
12021.02322
12016.88532
12013.056
12009.56036
12006.42115
12003.65867
12001.29067
11999.33233
11997.79612
11996.69182
11996.02643
11995.80416
End of week intermediate term mean model projections starting Friday January 13.
12081.90362
12090.9535
12099.74756
12108.26785
12116.49679
12124.41724
12132.01258
12139.26672
12146.16421
12152.69024
12158.83073
12164.57233
12169.90254
12174.80967
12179.28292
12183.31243
12186.88927
12190.0055
12192.65418
12194.8294
12196.52631
12197.74111
12198.47108
12198.71458
