Market Volatility Rises In Accordance With The Algorithm

On March 31st 2014, I Know First shared the algorithms market outlook and specifically highlighted a foreseeable rise in market volatility. Since that date the Volatility Index (VIX) has jumped 18.18% in accordance with the algorithmic prediction.

This upcoming week has factors that can potentially instigate volatility to rise further:
1. Q1 earnings reports
2. Edgy market enviorment
3. Options expiration
4. Economic data to be released

Perhaps the most important factor is the first-quarter corporate earnings reports as earnings season commences. If earnings disappoint, it will be perceived as reflection of a weak economy and volatility will rise further.

First-quarter estimates have fallen even further as many companies have blamed a harsh winter for weak outlooks. This week, 54 S&P 500 components are scheduled to report first-quarter earnings including high-profile names such as General Electric (GE), Johnson & Johnson (JNJ) Google (GOOG) (GOOGL), IBM (IBM) and Goldman Sachs (GS).

Other indicators on the U.S. economy will be announced this week with retail sales on Monday, the Consumer Price Index on Tuesday, U.S. housing starts and industrial output on Wednesday and the Federal Reserve Bank of Philadelphia’s business activity index on Thursday plus the latest weekly initial jobless claims will be released on Thursday as well. Federal Reserve Chair Janet Yellen will also garner attention when she speaks on Wednesday to the Economic Club of New York.

This is a lot of new information in just one week plus options will be expiring as well, putting a lot of pressure in a four-day week. The U.S. stock market will be closed for Good Friday.

While there are many variables that will go into play this week, there are still market opportunities identified by the algorithm. For instance, our Top 5 recommendations recently returned an average of 8.77% versus the S&P 500’s drop of -0.31% from March 9th-April 9th.

Before making any trading decisions, consult the latest forecast as the algorithm constantly updates predictions daily. While the algorithm can be used for intra-day trading the predictability tends to become stronger with forecasts over longer time-horizons such as the 1-month, 3-month and 1-year forecasts.

Missed the latest trend? Looking for the next rising stock? Find out todays stock picks based on our advanced self-learning algorithm

Leave a Reply