This week we have a stock market forecast for the week of 5/23/21 from our friend Bo Yoder of the Market Forecasting Academy. Be sure to leave a comment and let us know what you think!
The S&P 500 (SPY)
In last week’s forecast, I shared that I expected “a lower high to form and then a push back down to break below the recent lows near $405.” The S&P 500, (analyzed here using SPY) did indeed form a lower high and DID test the $405 level, but without the bearish sponsorship needed for a breakdown.
The price quickly ping-ponged back up to retest the recent lower high and was rejected in Friday’s session. The pressures of supply and demand that I can measure have moved back closer to balance, which makes the odds for a correct forecast this week lower probability. The tendency will be for the price to flop back to the $405 lows, but unless there is a new surge of bearish energy this week, the odds for that breakdown have sharply reduced. More likely is an extension of the range until one side or the other asserts itself. With the odds for a clear forecast diminished, it’s a “risk-off” week for me as I prune exposure and wait for new opportunities to show themselves.
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The price action in Autodesk (ADSK), rallied right back up to the $280 area as forecast last week. This makes the call to exit near $275 even sweeter. As you are starting to realize as you follow these forecasts, each bar offers a new measurement showing a real-time snapshot of supply and demand using the proprietary forecasting tools we teach at Market Forecasting Academy. This delivers a continuous flow of data which is so helpful when managing open trades.
If the pressures are growing…you hold on to the wiggles without fear and with total confidence. When things shift, ESPECIALLY when you are near your profit targets... that’s a clear and objective signal to take profits and eliminate risk.
Honestly, I get more of an emotional “YESSS” reaction when I snatch profits from a market, JUST before it rips them back like I did here in ADSK than I do for a great forecast that just goes on and on like say my forecast in gold.
I hope a lot of you are paying close attention to these forecasts and are making some good profits... I’d love your feedback. Leave questions or comments and let me know these words are helpful to you!
Electronic Arts (EA)
Electronic Arts (EA) continues to chew through the support near $135. The price cycled back up to test some resistance near $143 and was rejected. This trade is on the chopping block for me. Next week’s action and the measurements I see at the end of the week will determine whether I scratch for a small profit or continue to let this position “breath”.
I am getting extremely tired of this Coca-Cola (KO) position and its ability to produce ANY movement.
Another week has passed without any substantial change to the supply/demand pressures. Therefore, I am not changing anything at this time, but it’s do or die time for this position. Next week KO must produce clear confirmation, or I will scratch for a loss to free up the capital for a more productive position.
If KO has disappointed by underperforming, Gold (analyzed here using the GLD) balances that out by its superb outperformance.
Having rallied for weeks now without a substantial correction, the gold market is overdone and ready to correct. The pressures are overwhelmingly bullish, so any correction would be a healthy and proper thing at this time. If interested, profits could be taken early next week to capture gains. However, I’m looking at this as a longer-term strategic position and believe I have correctly forecasted a significant bottom in this market, so I want to maintain exposure. I’ll plan to “be right and sit tight” when a correction forms.
The Eurodollar vs The US Dollar
The EUR/USD currency pair continues to work out a textbook head and shoulders reversal pattern on its weekly chart. A large “tail” on the weekly chart should attract sellers next week and I would be expecting to see a push down to close out the week below the 1.2100 area.
This short is still considered attractive anywhere within the red zone and should produce at minimum a retest of the lows near 1.1700.
To Learn How To Accurately and Consistently Forecast Market Prices Just Like Me, Using Market Vulnerability Analysis™, visit Market Forecasting Academy for the Free 5 Day Market Forecasting Primer.
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About Bo Yoder:
Beginning his full-time trading career in 1997, Bo is a professional trader, partner at Market Forecasting Academy, developer of The Myalolipsis Technique, two-time author, and consultant to the financial industry on matters of market analysis and edge optimization.
Bo has been a featured speaker internationally for decades and has developed a reputation for trading live in front of an audience as a real-time example of what it is like to trade for a living.
In addition to his two books for McGraw-Hill, Mastering Futures Trading and Optimize Your Trading Edge (translated into German and Japanese), Bo has written articles published in top publications such as TheStreet.com, Technical Analysis of Stocks & Commodities, Trader’s, Active Trader Magazine and Forbes to name a few.
Bo currently spends his time with his wife and son in the great state of Maine, where he trades, researches behavioral economics & neuropsychology, and is an enthusiastic sailboat racer.
He has an MBA from The Boston University School of Management.
Disclosure: This article is the opinion of the contributor themselves. The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. This contributor is not receiving compensation for their opinion.