So how can this be used? I don't know. The trajectory algorithm is my own creation and it's a bit arbitrary. I think the odds table itself contains what you need to know. I only know the next day forecast has been pretty accurate, and the two-three day forecast has been giving reasonable price targets.
|Category||Prediction Rate||% Correct||Notes|
|Direction||11/14||79%||13/14 disregarding minor closing range|
|Range||8/14||57%||12/14 disregarding minor closing range|
|Significant High/Low*||no instances|
|Unfilled Gap**||1/2||50%||Testing Tomorrow|
|Next Day Gap**||2/2||100%||Testing Tomorrow|
** An unfilled gap occurs when the market gaps and never fills. The next day gap determines if the condition correctly predicted the gap.The unfilled gap and next day gap tests are measuring times the odds of a positive low or negative high were >= 14%.
+ When the odds of a negative high/pos low <= 3% and the market gaps in the low odds direction, the gap fills.
I have to post the trajectory and full odds table tonight because I'm mobile today.
Direction was correct today while range was wrong. The trajectory seemed to indicate that a large pullback was coming. It got the day wrong, but the price (around Dow 11,300) was hit today. Is the pullback over? Possibly. The odds for tomorrow are positive, but the odds of a negative high are as high as I've seen.
We'll be testing tomorrow:
- Since the odds of a negative high >= 14%, does the market gap down and never fill the gap?
- Since the odds of a negative high >= 14%, does the market gap down tomorrow?
Being short here doesn't look all that favorable, because the odds of a significant low tomorrow are just 43%. Also, remember that the trajectory from a few days ago pointed higher a few days out (not sure how it looks now though). So even if the market does gap down, it's not likely to be a big drop. We'll see.