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[highnote]

I have been maintaining a stock market timing model for the past 5 or 10 years that was devised by Martin Zweig. Last week I got the biggest buy signal that the model gives. It also gave a couple smaller buy signals a week or so earlier.

Check back here in 6 months. I estimate that the SP will rise by at least 15% by June 15, 2019.

Last time I made this prediction I got the direction right, but it took a little longer than 6 months to hit the target.

The cyclical low of the S&P was 2351 back on December 24, 2018. If it increased by 4% from that low to 2445, that would be a buy signal. It rose 4% by December 26. That signals a lot of buying momentum.

So I'm looking at a target for the SP of at least 2811 -- up 15% from December 26's close, but more likely 2931 based on the close of January 7, 2019.

The following indicator is why I am so bullish:

On January 7, the NYSE Advancing Stocks to Declining Stocks ratio over a 10 day period was greater than 2-1. That is a huge buy signal based on momentum. It has only happened twice since 1993. It happened in March of 2009 at the bottom of the financial crisis when interest rates dropped and the Fed started QE. It happened in July 2016 when everyone thought Hillary was a lock to win the presidency -- investors saw stability in that not much would change from the Obama presidency.

There was also another strong indicator on December 26, 2018 when the NYSE Advancing volume to declining volume ratio was greater than 9-1 -- it hit 24-1. It takes a lot of buying to get to that ratio. Money is flooding into the market.

The last time the Adv/Dec vol ratio was greater than 9-1 was on January 29, 2016. July 2016. Before that it was October 5, 2015. There were a bunch of 9-1's back in late 2008 when the market was volatile. There were also a bunch of 1-9's which signaled a lot of selling. The market didn't know which way to go.

Then on March 23, 2009 the Adv vol to Dec vol ratio hit 48-1! The bull market was in full swing at that point.

The ratio was 24-1 on December 26, 2018. That's only half as strong as March of 2019, but it is the strongest and only one since election day November 7, 2016 when everyone thought Clinton would be the president.

Since Trump got elected there have been 6 or 7 days where the Declining volume exceeded the Advancing volume by a ratio of 9 to 1. This is not meant to be a political thread, but only to show that there was a lot of uncertainty during Trump's first two years in office. Not all of the uncertainty was due to him, but, nevertheless, it happened during his tenure.

However, it looks like that uncertainty has been priced into the market and now the market should do well over the next 6 months.