Market Update 1.25.25

It’s been a while since we posted a market update. The end of 2024 brought a market pullback that we view as a normal part of healthy growth. During that period, we observed several minor gains and losses within an overall medium-term bearish trend. At the time, our model projected an 85% chance of positive returns over 14, 21, and 28-day horizons. While the shorter-term projections did not materialize, as of Friday’s close, the market is now aligned with the previously published 28-day target.

This serves as an important reminder that 85% is not 100%. Even though our model performs very well, it is not perfect (and no model is). As such, we must always account for potential inaccuracies when constructing our portfolios.

Looking ahead to the coming trading days, our model suggests that moderate gains are probable for the tracked indices over the next seven days. However, we cannot entirely dismiss the possibility that a short-term peak has already occurred. The probability of positive return remains below our nominal threshold, indicating that market bulls may be fatigued and vulnerable to a short-term bearish reversal.

Disclaimer: The information provided here is for educational and informational purposes only and should not be interpreted as financial advice. I am not a licensed financial advisor, and my portfolio strategies may not align with your financial goals or risk tolerance. All investments carry inherent risks, including the potential loss of principal. Historical data and model-based projections are not guarantees of future performance. Please consult with a licensed financial professional before making any investment decisions.