S&P500 (Ticker ^GSPC) detailed analysis 2018-2024, 14 forecasts every 6 months.

In this article we will present the analysis of the forecast algorithms on S&P500 (Ticker ^GSPC), on a period from 2018 to 2024, generating forecast each half a year, on January and on July for total of 14 forecasts. Each forecast presents the next 9 months ahead for regular presentation and in some cases also 2 years ahead for long term presentation.

The target is to check how each of the projection lines is forecasting the future, along a long period of 14 half years (7 years), their accuracy and consistency over time.

Each forecast includes the following projection lines, presented by a different color:

Red – A few years cycle, long term trend
Blue – a few months cycle
Pink – a few days cycle
Green – a detailed version of the pink algorithm

With the projection lines pictures you will find also some description of the meaning of the directions.

Summary of analysis

The forecast algorithm present a very accurate and consistent projection for GSPC along the 7 years.
There are only 4 places where the algorithm missed the direction:
- Forecast of July 2023, a month delay in forecast – Dec instead of Nov, partial correction by the green line.
- Forecast of Jan 2023, where one month May-Jun is inverse.
- Forecast of July 2022, from Aug/Sep 2022 to Nov 2022 (no inversion signals were detected), however, the forecast from Jan 2022 is correct, and the difference can be used as a warning signal.
- Forecast of July 2023, from Nov 2023 to Dec 2023. (The green projection lines provides partial correction).
- Forecast of Jan 2019 – miss of the bottom on June, potentially a temporary inverse case
Roughly describing the missed directions of up to accumulated 3 months in 7 years is about ~3.5% (96.5% accuracy) for this case
The Green algorithm added some minor information on top of the pink
looking for cycles where the market is only trending and not cycling is a challenge (i.e. Jan 2021)
The projection lines provided a good forecast sometimes up to 2 years ahead, as you can see in the examples ahead

Detailed Analysis

2018 Jan

Red line – indicates a change of pace from up to sideways.

Blue line – catches well the bottom on Feb and top in Sep.

Pink line – catches well the top in Jan, bottom in Feb, bottoms in Apr, May, top in Sep and bottom on Oct

Adding the green line adds some minor information, in this case it is negligible

2018 July

Red line – indicates a downward direction which was caught very well

Blue line – catches well the top in Sep and bottom in Dec

Pink line – catches well the tops in Oct, Nov, and the bottoms on Dec, Mar

Adding the green line catches more tops and bottoms

2019 Jan

Red line – indicates the continuation of a sideways in long term

Blue line – catches well the change of directions in Jan, June Aug – the “bend” in the line between Apr to Jul indicates a potential inverse case

Pink line – catches most of the changes but smooths the sharp changes

Adding the green line adds some more tops/bottoms but misses the bottom on June, probably due to the inverse case.

Long term view of this forecast shows a very good capture of the long term sideways direction and the bottom on Feb 2020

2019 July

Red line – Catches well the start of the long term uptrend

Blue line – catches well the change of direction on Sep and provides early notice for the change of direction on Feb

Pink line – catches well the bottoms on Sep and Feb/Mar

Adding the green line does not add much information in this case

Long term view of this forecast shows the good indication of the strong uptrend and the great catch of the Feb sudden drop and the immediate continuation of the uptrend.

2020 Jan

Red line – captures well the strong long term uptrend

Blue line – captured well the change of direction in Jan, Mar and Sep

Pink line – captures most of the tops/bottoms along the blue line

Adding the green line adds more information such as the important top in Feb, bottom on Mar

Long term view of this forecast shows the great catch of the long term uptrend and the bottom on Mar 2020

2020 July

Red line – captured the strong long term uptrend

Blue line – captured well the change of trend on Sep (up to sideways) and on Dec (sideways to up)

Pink line – captured well the exact days of changes. A note here: in a tending only market, such as in this example, the algorithms are still looking for changes, sometime they may appear exaggerated as in this example

Long term view of this forecast shows very good catch of the long term trend with the change of direction at the end of 2021

2021 Jan

Red line – caught well the uptrend

Blue line – looking for cycles where the market is only trending and not cycling is a challenge

Pink line – looking for cycles where the market is only trending and not cycling is a challenge

Long term view of this forecast shows an excellent capture of the change in trend at the beginning of 2022

2021 July

Red line – captures well the change of direction on beginning of 2022

Blue line – caught the important changes of directions on Oct, Jan, Mar

Pink line – caught most of the dates of tops and bottoms

Adding the green line improves the prediction on all periods

Long term view of this forecast shows an almost perfect fit

2022 Jan

Red line – captured the change of direction from up to down

Blue line – captured well the important dates of change of directions

Pink line – captured well most of the bottoms and tops

Adding the green line provides additional confidence to the dates indicated by the pink line

Long term view of this forecast shows an almost perfect fit

2022 July

Red line – captured the continuous down/sideways

Blue line – did not capture the price trend from Aug to Dec

Pink line – did not capture the price trend from Aug to Dec

Comparing the forecast with the projection from Jan 2022 shows that the prediction from Jan 2022 is still valid, and the prediction from July 2022 differs