The Forecasting Advisor began to assess in December 2010 the risk of a reversal of the U.S. stock market in a bear market with its exclusive stock market cycle model. The stock market cycle model integrates a number of key U.S. economic and financial indicators, such as on the state of the economy and labour market, interest rates, consumer sentiment and the P/E ratio, to determine the probability of reversal from a bull market to a bear market or from a bear market to a bull market. The probability is calculated at the beginning of the month and for forecast horizon of two months. The model predicts a reversal of the S&P 500 index from a bull market to a bear market when the probability is equal to or greater than the usual threshold of 50%.
The assessment of the real-time forecasts of the U.S. stock market cycle model can be obtained from the following link: document.
Key results are:
Looking ahead, the U.S. stock market cycle model will provide unique and valuable information on the risk or the probability of a reversal of the stock market from a bull market to a bear market or from a bear market to a bull market.