Model B

An annual summary of Model B’s results is below.

I created Model B to see if it could provide a useful indication of whether the market is more likely than average to be higher in 4 weeks than it currently is. The QQQ ETF is used as a proxy for the market.

A ‘Positive’ model output means that in the past, under similar conditions, there was a greater than average chance that the market would be higher in 4 weeks than it was when the output was made.

A ‘Negative’ model output means that in the past, under similar conditions, the model did not provide any statistically useful information about likely market direction over the next 4 weeks.

The table below is an annual summary of Model B’s performance. For each year the table lists:

The number of ‘Positive’ signals it gave
The percentage of ‘Positive’ signals where the market was higher 4 weeks later
The average percentage change in the market on a ‘Positive’ signal 4 weeks later
The number of ‘Negative’ signals it gave
The percentage of ‘Negative’ signals where the market was higher 4 weeks later
The average percentage change in the market on a ‘Negative’ signal 4 weeks later

I encourage you to look at the weekly results as well as the annual summary. Averages are useful, but they hide a lot of important information.

I’m primarily interested in the ‘Positive’ signal statistics. I include the ‘Negative’ signal statistics for comparison purposes.

YearPositive CountPositive Up PercentPositive Avg ChangeNegative CountNegative Up PercentNegative Avg Change
2017977.8%+2.1%4386.4%+2.2%
20181080.0%+2.8%4247.6%-0.8%
2019
2020

Keep in mind that Model B was created based on past market behavior, but future market behavior may be very different than past behavior.