Bulkowski's 2020 Forecast Updated

This is a graph of the chart pattern indicator (CPI) against the S&P 500 index. Briefly, the CPI counts the number of bullish patterns to bearish ones in the belief that at significant market turns, the bearish patterns will outnumber the bullish ones, or vice versa. The thin blue line at the bottom of the chart is the CPI. The most recent signal is bullish, denoted by the vertical green bar on the far right of the chart. It's a stable signal which won't disappear (signals can change for up to a week). Look at A and B. Notice that A is flat while the indicator at B is dropping. This divergence is telling us that the underlying market is weak and about to fall. It might not, but that's what the CPI is saying now. The next chart looks at the 2020 forecast for the Dow industrials.

Because of the steep drop in the Dow, the forecast looks flat (it compressed the scale. See the entire forecast here, without compression). I drew the left blue line to show where in the forecast we are today. I show a second blue line to indicate where the forecast predicts weakness. That's in mid May. And that's a bit later than I was expecting. By that, I mean quarterly earnings will be arriving shortly and that will likely drive the market lower, to form a second bottom, mirroring the first one in March. The chart shows the index ending the year a bit higher than it began, but it didn't count on Covid-19. The next chart shows the forecast for the Nasdaq.

Here's a chart of the Nasdaq. I drew two blue lines, one to show were we are now and the right one to show a coming low point in the forecast. Notice that the composite ends the year lower than where it began. The next chart shows the SPX (S&P 500).

Here's the S&P 500 (SPX, really) on the daily scale. The two blue lines are the same indicators I've already discussed. The index ends the year at about where it began. And that's the end of the forecast review. Toodle pip!