An old financial adage states that the stock market’s action leads the economy by six months. Which begs the question, where will the economy be in November? Here is a chart using experimental models for predicting out 180 days. The graph shows the strength prediction for $QQQ; the red line on the chart is the mean average. The value is somewhere around 3.85, which is well into the bearish zone. The models call for the overall U.S. markets to remain bearish through the end of November. The correction is happening now; what are you doing to survive financially?
Let’s look at last night’s sector strength chart based on the corresponding ETF averages; this week’s overall average is still bearish with a value of 3.88, which is down slightly from last week’s 3.98.
For the fourth week in a row, the Technology sector has a bearish forecast for the next 30 trading days, with an average score of 3.07. Next week, the Consumer sector has a poor prospect; the computed average is 2.4. In this sector, $XLP may have the worst results.
The Energy sector continues to have the best short-term prediction. This week, the models predict it to occur from June 21 through 27 with a computed average of 5.8. The estimated best ETF in that sector for that period is $AMLP. The models also have the Real Estate sector recovering starting in the middle of June, and as I reported on my blog Friday morning, I am having a hard time believing the models.