Revisiting The Signals That Forecasted Every Major Downturn Since The 2018 Volatility Shock: What's Next

Jan. 29, 2020 1:19 PM ETAAPL, FNGD, FNGU, TVIXF19 Comments


  • Members of my service were alerted last Friday morning that the Momentum Gauges turned negative for the first time since Sep 2019.
  • This article highlights three reliable signals that have forecasted every major market decline since the VIX volatility event called "Volmageddon" at the start of 2018.
  • The inverse signals initiated the buy signal on October 15th that preceded gains of over 10% in the S&P 500, +93.9% in FNGU, +49.9% in TQQQ, and +31.9% in SPXL.
  • The new signal change impacts the 12 different Bull/Bear ETF combination trades used to leverage market direction changes for maximum returns.
  • This article revisits each of the prior forecast events and illustrates likely short-term outcomes to the signal on Friday, January 24th.
  • This idea was discussed in more depth with members of my private investing community, Value & Momentum Breakouts. Get started today »


This article examines the current breakdown signal against the 3 measures that forecasted every major downturn since Volmageddon in my previous analysis in August of 2019. Two of the measures have turned negative and one of the measures remains unchanged since July 2019. I will review the four most recent downturn events and address the current breakdown signal from the Momentum Gauges on Friday, January 24th.

Historically, there have been a total of 5 prior Momentum Gauge event signals as shown on the long-term weekly chart above.

Event number 1 on the chart was not a forecasted event but was confirmed by the multiple discriminant analysis (MDA) values of my model while we experienced the 2018 "Volmageddon" event. This first event was so unique and significant that it prompted me to use the Momentum Gauge model on a more frequent basis. I now run the model not only weekly but multiple times intraday for members of my service. It was also a key volatility event that brought into close focus the impact of the new Federal Reserve quantitative tightening (QT) policies that began implementation in January 2018. As an update to my article last year, I will revisit these conditions as the 6th event begins.

Forecasted Events of the Momentum Gauge Signals

To date, there have been four forecasted events using the criteria that compose the model derived from my doctoral research on the price momentum anomaly and reversal event signals. Each of these four signaled events will be looked at again briefly with reference to prior published articles in a process to consider the strength of the most recent Momentum Gauge topping signal last Friday.

The three indicators applied to each of these forecasted events with high reliability are:1. The Momentum Gauge scores turning negative intraday, daily, and then on the

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This article was written by

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Revealing the best financial models targeting double digit success

Welcome! I am a Finance PhD, MBA, investment adviser, fraud examiner and certified anti-money laundering specialist with more than 30 years trading and investing stocks and other securities. I'm the founder of Value & Momentum Breakouts.


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