Energy And Real Estate Sectors on Top for The Next Six Weeks

To start things off, I shorted the Chinese markets yesterday afternoon by buying some $YANG (Direxion Daily FTSE China Bear 3X Shares). As of this morning, China is up, which is making that purchase look dumb, But I still think that the Evergrande situation has not been fully completed.

enter image description here The Energy sector has the best overall forecast for the next 30 trading days, with an average score of 5.91. The Real Estate sector has the best short-term prediction, which should occur in 26 to 29 days. The computed average is 6.98. The estimated best ETF in that sector for that period is $URE.

On the sell side, the Metals & Miners sector has the worst overall view for the next 30 trading days, with an average score of 3.90. Also, the Metals & Miners sector has a poor prospect in the 27 to 30 day period; the computed average is 3.31. In this sector, $AGQ may have the worst results.

After 3 Down Weeks and The Evergrande Scare The Markets Have Almost Recovered

The markets have almost recovered from the previous three-week losses and the Evergrande scare.
enter image description here Let's look at last night's chart; the models' predictions are down slightly from the previous week's numbers. The overall average is 5.06; the previous week's average was 5.32. enter image description here The Real Estate sector has the best overall forecast for the next 30 trading days, with an average score of 6.09. And the Real Estate sector has a good short-term prediction, which should occur in 23 to 30 days. The computed average is 6.99. The estimated best ETF in that sector for that period is $URE.

In contrast, the Metals & Miners sector has the worst overall view for the next 30 trading days, with an average score of 3.89. Also, the Metals & Miners sector has a poor prospect in the 26 to 30 day period; the computed average is 2.96. In this sector, $AGQ may have the lowest results.

The Models Are Not Positive About the Next Five Market Days.

Here is a snippet of the next six days of estimates from last night's run. The models do not expect much positive movement in any sector over the next five days. We will see. enter image description here

The Real Estate sector has the best overall forecast for the next 30 trading days, with an average score of 5.66. And the Real Estate sector has a good short-term prediction, which should occur in 24 to 27 days. The computed average is 6.48. The estimated best ETF in that sector for that period is $URE. Next is followed by the Health Care sector with a good forecast in 22 to 25 days. The computed average is 6.43. The estimated top ETF in this sector for the period is $CURE. enter image description here In contrast, the Metals & Miners sector has the worst overall view for the next 30 trading days, with an average score of 3.96. The Commodities sector has a poor prospect in the 1 to 4 day period; the computed average is 3.28. In this sector, $XLB may have the worst results. Coming in second with a weak prospect is the U.S. Stock Mkt sector in 2 to 5 days. The computed average is 3.58. The models expect the ETF $XLI to finish the lowest in this group.

Should We Expect Another Down Week

We have had two down-market weeks, and other stock market analysts are calling for next week to be another down week. Jeff Hirsch at the Almanac Trader and Rob Hanna at Quantifiable Edges present historical data showing that the average market returns will be weak following the third week of September. We'll see.

Let's look at last night's chart; the models' predictions are up from the previous week's numbers. The overall average is 5.32; the previous week's average was 5.13. enter image description here The Real Estate sector has the best overall forecast for the next 30 trading days, with an average score of 6.23. And the Real Estate sector has a good short-term prediction, which should occur in 26 to 29 days. The computed average is 7.51. The estimated top ETF in that category for that period is $IYR.

On the sell side, the Energy sector has the worst overall view for the next 30 trading days, with an average score of 4.04. Also, the Energy sector has a poor prospect in the 27 to 30 day period; the computed average is 3.04. In this sector, $ERX may have the worst results.

Tech Takes Top Pick For The Next Six Weeks, But Not By Much.

The Technology sector has the best overall forecast for the next 30 trading days, with an average score of 5.74, which is not very strong. The Real Estate sector has the best short-term prospect, which should occur in 23 to 26 days. The computed average is 6.52. The estimated top ETF in that category for that period is $VNQ. Next is followed by the Health Care sector with a good forecast in 20 to 23 days. The computed average is 6.31. The estimated best ETF in this sector for the period is $XLV. enter image description here In contrast, the Metals & Miners sector has the worst overall view for the next 30 trading days, with an average score of 4.44, neutral is 4.5. Also, the Metals & Miners sector has a poor prospect in the 27 to 30 day period; the computed average is 3.72. In this sector, $GDX may have the worst results. Coming in second with a weak prospect is the Financial sector in 9 to 12 days. The computed average is 3.76. The models expect the ETF $KRE to finish the lowest in this group.

Five Down Days - What's Next

So the markets have had five consecutive down days, which has many analysts concerned. While my models don't indicate any significant correction coming up, I am apprehensive. Here's why. Besides the models I use for the ETF Expectations report, I run algorithms using Monte Carlo and QLearning methodologies. Here is the output from the algorithms run that ran last night. enter image description here These methods are showing bearish calls for the overall market. The calls target range is one week. Out of the twenty studies done, only three say stay in stock calls, and two are not very strong. For clarification, some calls have high "to stocks" percentages; those calls are for Inverse ETFs, which are considered bearish calls for the overall market.

Let's look at last night's chart; the models' predictions are up from the previous week's numbers. The overall average is 5.13; the last week's average was 4.5.enter image description here

The Health Care sector has the best overall forecast for the next 30 trading days, with an average score of 5.60. The Real Estate sector has a good short-term prospect, which should occur in 23 to 30 days. The computed average is 6.69. The estimated top ETF in that category for that period is $URE. Next is followed by the Health Care sector with a better than average forecast in 6 to 15 days. The estimated top ETF in this sector for the period is $XLV.

In contrast, the Metals & Miners sector has the worst overall view for the next 30 trading days, with an average score of 3.49. The Commodities sector has an underperforming prospect in the 16 to 20 day period; The computed average is 2.80. In this sector, $XLB may have the lowest results. Coming in second with a weak prospect is the Energy sector in 19 to 29 days, with the ETF $IYE expected to finish the worst in this group.

Metals And Miners, Commodities and Energy Are On The Sell Side For Next 30 Trading Days.

The Metals & Miners sector has the worst overall view for the next 30 trading days, with an average score of 3.93. The Commodities sector has an underperforming prospect in the 26 to 29 day period; the computed average is 3.11. In this sector, $XLB may have the lowest results. Coming in second with a weak prospect is the Energy sector in 22 to 25 days. The computed average is 3.23. The models expect the ETF $XOP to finish the worst in this group. enter image description here On the buy-side, the Health Care sector has the best overall forecast for the next 30 trading days, with an average score of 5.25. The Real Estate sector has a good short-term prediction, which should occur in 27 to 30 days. The computed average is 6.84. The estimated top ETF in that category for that period is $IYR.

I Am Avoiding The Precious Metals and Miners Sectors.

The models' predictions are down from the previous week's numbers. The overall average is 4.50, which is less than last week's 5.07.

The Metals & Miners sector has the worst overall view for the next 30 trading days, with an average score of 3.49. enter image description hereThe Commodities sector has an underperforming prospect in the 17 to 20 day period; The computed average is 2.80. In this sector, $XLB may have the lowest results. Coming in second with a weak prospect is the Energy sector in 19 to 25 days, with the ETF $IYE expected to finish the worst in this group.

In contrast, the Health Care sector has the best overall forecast for the next 30 trading days, with an average score of 5.60. The Real Estate sector has a good short-term prospect, which should occur in 25 to 30 days. The computed average is 6.69. The estimated top ETF in that category for that period is $URE. Next is followed by the Health Care sector with a better than average forecast in 8 to 15 days. The estimated top ETF in this sector for the period is $XLV.

The Financial Sector Moves To The Top For Next Six Trading Weeks

The Financial sector has the best overall forecast for the next 30 trading days, with an average score of 5.51. And the Financial sector has the best short-term prospect, which should occur in 14 to 17 days. The computed average is 6.29. The estimated best ETF in that sector for that period is $KRE. enter image description here In contrast, the Metals & Miners sector has the worst overall view for the next 30 trading days with an average score of 3.72. The Energy sector has an underperforming prospect in the 22 to 25 day period; The computed average is 2.84. In this sector, $VDE may have the worst results. Coming in second with a weak prospect is the Metals & Miners sector in 16 to 19 days, with the ETF $GDX expected to finish the lowest in this group.