How High or Low Will the S&P500 Go?

• 1 min read

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  • Monte Carlo meta: _aioseop_keywords: Excel, RiskAmp, Monte Carlo ysc_entity_script: YAHOO.Shortcuts.annotationSet=YAHOO.Shortcuts.annotationSet||{};YAHOO.Shortcuts.annotationSet[\'lw_1204023985_0\']={\"text\":\"Monte Carlo\",\"weight\":0.25,\"type\":[\"shortcuts:/us/instance/place/destination\",\"shortcuts:/us/instance/place/mc/town\"],\"category\":[\"PLACE\"],\"metaData\":{\"geoArea\":\"4\",\"geoCountry\":\"Monaco\",\"geoIsoCountryCode\":\"MC\",\"geoLocation\":\"(7.4269099, 43.738312)\",\"geoName\":\"Monte-Carlo\",\"geoPlaceType\":\"Town\",\"geoState\":\"Monte-Carlo\",\"geoZip\":\"98\"}}; _edit_last: '5' dsq_thread_id: '215449075' author:

    I mentioned to my members in this past week's Market Timing Report that I would run a Monte Carlo simulation on the S&P500 to see what are the potential upside and downside targets for the S&P500.

    The Monte Carlo sim confirmed my suspcisions that the the 1310 to 1340 level was indeed an interim support area and the sim calculated it as 1337. The simulation did indicate a negative bias for the S&P500 for the short term so I'm still concerned that we might see a breech of that level before we turn higher.


    The short term upside targets were calculated as: 1383, then 1429, and then 1475. The short term downside targets were calculated as 1291, then 1245, and then 1199.

    Now, these targets were simulated using a Gaussian distribution and we all know how that distribution breaks down in very volatile markets. The chances are that if we do see more downside action, it could be violent and my downside targets would be meaningless.


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