While past performance can’t be used to determine future performance, ChartDNA has done a reasonable job in tracking 5-day performance of the S&P, as measured by the iShares SPDR, $SPY. Up until July 2015, ChartDNA had offered a generally bullish tone, but by August 2015, outlook turned more bearish. This shift in the forecast was mapped by subsequent action in the S&P (SPY).
The Table below tracks all 5-day forecasts, determining them as bullish or bearish even if the margin was just a single percentage point above (bullish) or below (bearish) the 50% midpoint. Only the 50% forecast calls, where no advantage can be determined (marked in blue) were excluded from the returns.
The 5-day forecast success rate was 66%. So even when the forecast margins were small, they were often enough to determine the outlook 5 days out.
The Average Return per trade was +0.54% for all trades (winners and losers combined).
Splitting out the bullish and bearish forecasts; bullish forecasts were correct in 70.5% of cases, bearish forecasts in 42.8%.
With what looks to be a bear market in its early stages, it will be good to see how ChartDNA reacts to changes in such market conditions going forward.
