Bulkowski's 2021 Forecast May 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.

The CPI has turned bearish today (Friday) but the signal can disappear during the coming week. So don't over emphasize its importance. I will say that the CPI has been diverging from the index for a month now. That may translate into weakness in the markets (although it hasn't so far).

This is the Dow Industrials in black and the prediction in red.

At A, the prediction peaks in mid May, but the index has peaked at B (so far), about a month ago. Notice that after A it's all downhill until the bottom in September.

C shows where the prediction bottomed and the blue line shows the forecasted timing of the dip in the index.

Here's a chart of the Nasdaq.

This chart shares turns from the prior chart. A and B show where the index and the prediction have peaked. C and D show where the two bottomed and EF shows early peaks in both lines.

If the forecast is correct, look for the markets to drop going into late September.

Look at the timing of the turns. E and F peak near the same value, but F is late by about 2 weeks. Peak A precedes B but there's a pronounced move upward to A, mimicking the rise to B.

It suggests that the markets will drop, but not as far as the forecast predicts.

Taken as a whole, the market is following the forecast but the timing and extent are off. If the forecast continues with its accuracy look for four months of weakness.

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

Again, the two peaks are at A and B. C and D shows the two valleys. The market is forecasted to rise for about 2 weeks until it reaches peak B and then tumble going into the late September low.