etfmsolutions: SPY Ponzo Update..10.13.15

Tuesday, October 13, 2015

SPY Ponzo Update..10.13.15

This week's update of the Ponzo forecast continues the negative theme for SPY for the coming months. Keep in mind the model looks at the current 25 week price action and then looks at the past 25 years SPY price patters to find those scenarios that best match the current action and show what happened in the subsequent 18 weeks.
The short term ( 14 day) best historical fit line has been eerily correct for the past 3 months even in the face of multiple macro and micro economic factors driving the markets.
If you believe that history tends to repeat itself then using the Mosaic version of the Ponzo model may help you navigate the upcoming risk environment. Readers query on how to apply the forecast range and suggestions include selling appropriate ITM covered calls and selling call credit spreads at the outlier upper band strikes if you're bearish or selling put credit spreads at the lower outlier bands if you're bullish.
Using the Ponzo forecast and the VDX charts as a short term trend/momentum confirmation can be very effective.

Commentary and Updates

Mosaic Solutions commentary is typically published daily as time permits and market action warrants.
Posts feature Mosaic model updates including delta neutral stops, VIXEN directional trades and PONZO forecasts.

NOTE: Posted risk exposure indicators, signals and metrics apply to Mosaic models only. They are not directly correlated with price movement in the major market indices and can not be used to forecast directional changes in those instruments.
Each Mosaic model is a unique blend of risk factors and must be treated accordingly.

TRENDX is a proprietary Mosaic market signal that blends volume, RSI, momentum and rate of change.

ETF Mosaic Solutions and the editors of Mosaic Solutions are neither an investment advisory service nor registered investment advisers or broker-dealers and do not purport to tell or suggest which securities or currencies readers should buy or sell for themselves.
This site and related software products are for research and educational purposes only, and nothing herein should be construed as an offer to buy or sell, or as a solicitation of an offer to buy or sell securities, or to provide individual investment advice.

Investing is risky and past performance, whether actual or tested, is no guarantee of future results.
Any quantitatively derived allocations referenced herein should only be starting points for conducting your own research.

You are responsible for your own trading decisions and resultant gains or losses. When in doubt, please seek professional guidance from a registered adviser who can respond to your personal needs and risk profile.