Bulkowski's January 2022 Forecast Update

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.

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.

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.

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.

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.

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.

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-)