These are brand new Ponzo charts of the SPY and GSPC (S&P500 ETF and Index) that look forward 8 weeks as opposed to the standard models that look forward 18 weeks. The thinking here is that the odds of predicting what's going to happen in the next 8 weeks is considerably better than predicting what the markets are going to do 18 weeks out. And we use both the S&P ETF and Index to check for signal confirmation. Note the extremely low error factor on the Best Historical Fit insert chart.
Compare these charts with the results of the longer term (18 week) SPY and GSPC charts posted yesterday and Tuesday.
SO what do we do with these new Ponzo charts?
This is where it gets interesting.
We're going to be starting a new service using SPY weekly options to create short term credit spreads (2-3 weeks) and over the next week or so I'll explain some of the nuances of this defined risk strategy to complement the M3 suite of models.
