As of 09/15/2021
  Indus: 34,814 +236.82 +0.7%  
  Trans: 14,420 +134.87 +0.9%  
  Utils: 925 +0.27 +0.0%  
  Nasdaq: 15,162 +123.77 +0.8%  
  S&P 500: 4,481 +37.65 +0.8%  
YTD
 +13.7%  
 +15.3%  
 +7.0%  
 +17.6%  
 +19.3%  
  Targets    Overview: 09/15/2021  
  Up arrow35,600 or 33,800 by 10/01/2021
  Up arrow15,400 or 14,000 by 10/01/2021
  Up arrow965 or 905 by 10/01/2021
  Up arrow15,600 or 14,700 by 10/01/2021
  Up arrow4,650 or 4,350 by 10/01/2021
CPI (updated daily): Arrows on 9/15/21
As of 09/15/2021
  Indus: 34,814 +236.82 +0.7%  
  Trans: 14,420 +134.87 +0.9%  
  Utils: 925 +0.27 +0.0%  
  Nasdaq: 15,162 +123.77 +0.8%  
  S&P 500: 4,481 +37.65 +0.8%  
YTD
 +13.7%  
 +15.3%  
 +7.0%  
 +17.6%  
 +19.3%  
  Targets    Overview: 09/15/2021  
  Up arrow35,600 or 33,800 by 10/01/2021
  Up arrow15,400 or 14,000 by 10/01/2021
  Up arrow965 or 905 by 10/01/2021
  Up arrow15,600 or 14,700 by 10/01/2021
  Up arrow4,650 or 4,350 by 10/01/2021
CPI (updated daily): Arrows on 9/15/21

Bulkowski's 2021 Forecast April Update

 

Released 3/31/2021.

Forecast Updated for April 2021

Below is the updated forecast for 2021 as of the close on Wednesday March 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 / 4
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.

Mark Theriault made an interesting observation about this chart in an email today. Notice how the red and green stripes are closer together this year compared to last year.

What does it mean? Clearly it's a sign of heightened volatility because the signals switch from buy to sell in a week or so compared to a month (last year). Other than that, it's just a guess. It could mean a trend change is coming. A period of lower volatility might follow if you believe in Bollinger bands (periods of high volatility follow periods of low volatility, and the reverse). So maybe we'll see larger swings up and down which take longer to complete.

The next chart looks at the 2021 forecast for the Dow industrials.
2 / 4
Dow industrials chart

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

Until the start of March, the index was tracking the prediction quite well. This past month (March) they diverged with the prediction dropping to a low at A and the industrials rising to B.

If you ignore the scale, we can see that the index should gather strength going into mid May (C) and then struggle until the September low.

The Nasdaq forecast is next.
3 / 4
Nasdaq chart

Here's a chart of the Nasdaq.

Compare the last chart to this one and recall that the information technology sector dropped from first to last (11th) place for performance. The Nasdaq is known as a technology-heavy composite.

The forecast peaked at A whereas the index reached a high a bit later, at B. Then both dropped for a time. The index bottomed at C and the forecast hit ground at D.

Looking ahead we see the Nasdaq rising to E in mid May if the Nasdaq follows the forecast.

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

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

This chart resembles the Dow industrials chart. On the way to a forecast low at B, the index only reached D before rising to a high at A. The index should continue to rise to C, if it obeys the forecast (and if you ignore the scale). Just expect continued strength going into the early summer or late spring (mid May).

Also notice that all three market charts forecast a significant drop going into September. We should have a bullish ride for 6 weeks before it gets harder to make money on the long side.

The end.

See Also

 
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