The S&P 500 In Week 5 Of March 2016

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Includes: BXUB, BXUC, EPS, IVV, LLSP, RSP, RWL, RYARX, SDS, SFLA, SH, SPLX, SPUU, SPXL, SPXS, SPXU, SPY, SSO, UPRO, VFINX, VOO
by: Ironman at Political Calculations

For the last time, let's recall the prediction we made four weeks ago, back on 7 March 2016, when we explained why were going to discard our standard model's projections of a rough ride for the S&P 500 for the rest of March 2016:

That's also true for the projections for the remainder of March 2016, which suggest that stock prices are in for a rough ride before recovering. However, that apparent trajectory is really an artifact of the historic stock prices we use in our model to project their future trajectory, and as such, it is an echo of past volatility, which means that our model will be less accurate until that echo subsides....

So can we predict where stock prices are likely to go next?

Of course we can!... Provided investors keep their forward-looking focus on 2016-Q4 in making their current day investing decisions, we can expect that the S&P 500 will continue to track largely sideways (plus or minus 3% of their current value of just under 2000), through the end of March 2016.

Mathematically, with a base value of the S&P 500 of 2000, that plus or minus three percent means that we were predicting that the S&P 500 would range between 1940 and 2060 from 7 March 2016 through 31 March 2016.

The chart below visualizes how well our prediction actually fared:

Click to enlarge

We'll have some more comments about our prediction at the end of this post. In the meantime, for historical reference, here are what we considered to be the main market driving news events for the fifth week of March 2016.

31 March 2016 marked the end of our 7 March 2016 prediction for the range in which the S&P 500 would close on each remaining day of the month. Overall, we were right on 17 out of 18 days and on the only day we were wrong (thanks, Janet!), we missed the mark by 3.95 points, on a day where the market closed at 2063.95.

We used to keep track of our prediction accuracy, but we stopped after doing it for three years back in 2011. Keeping track that is, not being impossibly right so often. Even with our policy of not including near misses like the one described above - we've never kept score the way that they do in games of horseshoes, or for that matter, the Wall Street guru game.