As of 05/26/2022
  Indus: 32,637 +516.91 +1.6%  
  Trans: 14,142 +397.70 +2.9%  
  Utils: 1,022 +1.32 +0.1%  
  Nasdaq: 11,741 +305.91 +2.7%  
  S&P 500: 4,058 +79.08 +2.0%  
YTD
-10.2%  
-14.2%  
 +4.2%  
-25.0%  
-14.9%  
  Targets    Overview: 05/15/2022  
  Up arrow33,500 or 30,500 by 06/01/2022
  Up arrow14,700 or 12,400 by 06/01/2022
  Up arrow1,050 or 940 by 06/01/2022
  Up arrow12,800 or 11,000 by 06/01/2022
  Up arrow4,150 or 3,700 by 06/01/2022
CPI (updated daily): Arrows on 5/23/22
As of 05/26/2022
  Indus: 32,637 +516.91 +1.6%  
  Trans: 14,142 +397.70 +2.9%  
  Utils: 1,022 +1.32 +0.1%  
  Nasdaq: 11,741 +305.91 +2.7%  
  S&P 500: 4,058 +79.08 +2.0%  
YTD
-10.2%  
-14.2%  
 +4.2%  
-25.0%  
-14.9%  
  Targets    Overview: 05/15/2022  
  Up arrow33,500 or 30,500 by 06/01/2022
  Up arrow14,700 or 12,400 by 06/01/2022
  Up arrow1,050 or 940 by 06/01/2022
  Up arrow12,800 or 11,000 by 06/01/2022
  Up arrow4,150 or 3,700 by 06/01/2022
CPI (updated daily): Arrows on 5/23/22

Bulkowski's January 2022 Forecast Update

 

Released 1/1/2022.

Forecast Updated for January 2022

Below is the updated forecast for 2022 as of the close on Thursday December 31. Captions appear below the pictures for guidance, so be sure to scroll down far enough to read them.

On some of the charts (all except the CPI chart) the prediction in red is based on the work of Edgar Lawrence Smith in the 1930s. Smith said that the stock market followed a 10-year cycle. Each year tended to repeat the behavior of the year a decade earlier. In other words, if you averaged all years ending in 1 (2001, 1991, 1981 and so on), that would give you a forecast for 2011. For 2012, you'd make a similar average, only use 2002, 1992, 1982, and so on. That's what I did for the market forecast charts which follow.


1 / 7
chart pattern indicator

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.

As the green bar on the far right of the chart shows, the indicator is bullish with an 82.8% reading (where the top is 100%). The indicator has declined slowly over the last week. I think this is part of a normal retrace of the strong move up 2 weeks ago.

The next chart looks at the 2021 forecast update for the Dow industrials.
2 / 7
Dow industrials chart

This is the Dow Industrials in black and the prediction in red. The forecast missed the actual move by 5,500 points or 18%. The forecast looked dismal at the start of the year going forward even as the Dow moved higher. In September, the forecast began its recovery but it wasn't strong enough to catch up with the Dow.

The Nasdaq forecast is next.
3 / 7
Nasdaq chart

Again, the forecast missed the mark by a wide margin, almost 3,500 points. It shows the index closing lower for the year when it actually closed higher.

The next chart shows the SPX (S&P 500).
4 / 7
S and P chart

Here's the S&P 500 (SPX, really) on the daily scale.

This is similar to the prior chart, where the forecast pointed to a lower close when it fact, the index closed higher.

Next 2022 forecast.
5 / 7
2022 forecast chart

Here's the Dow industrials forecast for 2022.

If this prediction is correct, it'll be a down year for the Dow. It'll lose less than 1,000 points with a peak in March and dip in July. After July, the market goes sideways until the end of the year.

Next 2012 forecast: A look back at the prior 10-year prediction.
6 / 7
2012 forecast chart

Here's the forecast for the 10-years starting in January 2012 (Note: 10 years ago looking 10 years into the future). This shows how the forecast 10 years ago has unfolded in reality. It can give you some idea of how well the next 10 years might play out, how the forecast can be pessimistic or optimistic.

Ten years ago, the forecast was pessimistic, predicting a substantial rise, but falling well short of the actual move higher. If you bought-and-held over those 10 years, you could have almost tripled your money.

Next: forecast to 2032.
7 / 7
10-year forecast chart

Here's the forecast for 2022 to 2032.

According to the forecast, the Dow will drop to a low in late 2022 and then make a strong push higher for several years, until 2028. It gets bumpy then but eventually ends the period even higher, at almost 80,000. If you buy-and-hold, and if the prediction is correct, you could double your money (plus a bit more).

Ten years ago, the prediction said we'd fall short of seeing the Dow double. Instead, it almost tripled. Will the same come true this time? If you got your Covid vaccinations, perhaps you'll find out. 8-)

The end.

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