The statistical stock market forecasting model says:
February, 2020 +2%
Next 6 Months: +11% (Good.)
Probability of at least breaking even: 95% – 97% (74% is long term average.)
What am I doing? Fully invested since spring 2009. Preparing to worry later in the year.
All the flavors of my predictive market models remain decidedly positive. There has been a drop in the enthusiasm of the forecasts over the past few months, but they remain strongly positive with a very low probability of net decline over the coming half year.
Of course these market expectations don’t mean that the market can’t have a horrible collapse right away. Coronavirus or something else might blow things up. I don’t have any special insights on ‘black swans’.
The forecasts only mean that it the U.S. stock market responds to some key economic variables in pretty much the same way as it has behaved for the past several decades, then the market will probably do pretty well in the coming half year.
That said, to me (as opposed to my forecasting models), considerable stock market volatility with a negative slant seems likely until the world threat of coronavirus becomes better defined.
