market bias forecast may 2007 copyright 2007, a new story foundation, inc all rights reserved
TRANSCRIPT
Market Bias Forecast
May 2007
Copyright 2007, A New Story Foundation, Inc
All rights reserved.
What is a Market Bias Forecast?
• In researching social instability, A New Story Foundation has developed a method with high success in forecasting market movement in several key commodities and equity indices.
• Market Bias is the composite outlook of a quantified estimate of bullish and bearish investors’ perspectives.
May 2007 Market Bias Forecast. Copyright 2007, A New Story Foundation, Inc.
Market Bias
• Using a symbol set to represent the collective mood of bullish traders, a story is compiled for the market movement from that perspective.
• Strength of change is estimated for the entire month and for each time segment.
• The procedure is then repeated for the bearish perspective.
• Strength numbers for both bulls and bears are averaged. A price chart / price range is derived from these composite numbers.
May 2007 Market Bias Forecast. Copyright 2007, A New Story Foundation, Inc.
May 2007 – Summary
• Theme: Transition; a month of changing sentiment / trends.
• Crude oil, the Dow index, and the U.S. Dollar should trade primarily within limited ranges for the first half of the month, while attempting to make a trend change.
• Highest volatility, and greatest probability for a trend change that “sticks” is around mid-month.
May 2007 Market Bias Forecast. Copyright 2007, A New Story Foundation, Inc.
Crude Oil
• Bullish perspective for May:“Crude is technically set up for gains.”
• Bearish perspective for May:
“It’s difficult letting go of a trend.” • Overall strength of change is mildly bullish:
+2 (out of 5)
May 2007 Market Bias Forecast. Copyright 2007, A New Story Foundation, Inc.
Crude Oil - price
• Crude Oil spends the first half of the month range bound, and then breaks out, most likely to the upside.
• If the first week’s trend is down, look for the later break to be down.
May 2007 Market Bias Forecast. Copyright 2007, A New Story Foundation, Inc.
% Price Change, Cumulative - May 2007
0
1
2
3
4
5
6
7
1 7 14 21 28 31 June…
Crude Oil Forecast
Crude Oil - rangeCrude Oil Range - May 2007
65
66
67
68
69
70
71
72
73
74
Forecast
July contract expected low 66.20, high 73, close 72 for a net gain of 6% for the month.
Dow Index Futures
• Bullish perspective for May:“The market is running out of steam.”
• Bearish perspective for May:
“It takes a leap of faith to go short.” • Overall strength of change is mildly
bearish: -2 (max bearish -5).
May 2007 Market Bias Forecast. Copyright 2007, A New Story Foundation, Inc.
Dow Futures - price
• Difficult to tell what the stock market is going to do until the tug of war is resolved mid-month (likely by the bears).
• Losses should continue into June.
May 2007 Market Bias Forecast. Copyright 2007, A New Story Foundation, Inc.
% Price Change, Cumulative - May 2007
-3
-2.5
-2
-1.5
-1
-0.5
0
0.5
1 7 14 21 28 31 June…
Dow Futures Forecast
Dow Futures - range
Current contract expected low 12900, high 13300, close 12950 for a net loss of 1.7% for the month.
Dow Futures Range - May 2007
12800
12900
13000
13100
13200
13300
13400
Forecast
U.S. Dollar Index
• Bullish perspective for May:“Bottom looks solid; it’s ready to climb.”
• Bearish perspective for May:“It’s difficult to find reasons NOT to be
bearish U.S. dollar.”
• Overall strength of change is slightly bullish: +1 (out of 5)
May 2007 Market Bias Forecast. Copyright 2007, A New Story Foundation, Inc.
Dollar Index - price
• Look for ambivalence in the dollar through mid-month, then a break out, likely to the upside.
• The new trend may not be sustainable through the end of the month.
May 2007 Market Bias Forecast. Copyright 2007, A New Story Foundation, Inc.
% Price Change, Cumulative - May 2007
0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
1.8
1 7 14 21 28 31 June…
US Dollar Index Forecast
Dollar Index - range
Current contract expected low 81, high 83, close 82.6 for a net gain of 1.5% for the month.
Dollar Index Range - May 2007
81
82
82
83
83
84
Forecast
May 2007 Market Bias Forecast. Copyright 2007, A New Story Foundation, Inc.
Market Bias Summary - volatility
This composite shows the heightened volatility expected mid-month.
Rate of Price Change - May 2007
-0.8
-0.6
-0.4
-0.2
0.0
0.2
0.4
0.6
1-4 7-11 14-18 21-25 28-31 Next Month
Crude Oil Dollar Stocks
Disclaimer
The reliability of the forecasts corresponds with our current ability to reliably ascertain and score the collective mood of bullish and bearish investors for each time period under review.
A New Story Foundation is not a brokerage firm nor are we professional investment advisors. Please consult the appropriate person/firm for specific investment advice.
More information about our research can be found on our website at http://www.anewstory.org.
Thanks for your interest!