Dave Allen

About the Author Dave Allen

Dave is the VP of Sales and Marketing of EidoSearch. He has over 14 years of proven success working in the Financial Services vertical. Mr. Allen was most recently GM for Americas at TIM Group, the world's leading Alpha Capture network, where he ran sales and service functions for the region and was a member of the company's steering committee responsible for strategic initiatives. He came to TIM Group via their acquisition of First Coverage, a financial technology startup, where he was VP Sales and Marketing and responsible for sales, marketing and business development efforts with brokerage firms, asset managers and hedge funds. Prior to that he has an impressive track record in sales management, channel development and as a sales contributor in roles with CCBN StreetEvents, Thomson Financial and Decision Resources.

85% Probability the S&P 500 Drops Less Than -1.2% This Week

Chinese markets are in free fall, oil prices are plummeting and many emerging markets are now teetering on the edge of bankruptcy. Yet, there is 85% probability the S&P 500 drops less than -1.2% by this Friday’s close.

This is a bold statement, since as of this writing (around 9 AM) S&P 500 Futures are down another 4% on top of the already 5% drop we saw over the last two trading sessions last week. However, this is not a prediction. This is just statistics and a gauge for the most likely outcomes this week for the S&P based on the markets reaction to similar trading environments throughout history.

there is no precendent for a drop of more than -3.6% over the next 5 days

We looked at the last 10 days trading pattern in the S&P 500, and found about 100 statistically similar 10 day patterns in close to 40 years of the Indices history. Here’s a visual on the 5 most similar matches, with dates on the bottom and what happened in the next 5 days in green:

sp matches

Plotted below are the next 5 days returns for all 99 highly similar matches we found for the current 10 day pattern in the S&P 500 as of Friday’s close. The worst result is a -3.6% drop in the next 5 days, and only 5 of the 99 are off more than -2.3%:

sp returns

The stats table above shows an Upside and Downside band between 3.4% and -1.2%. We’ve done millions of predictions on these types of projections, and there’s 85% probability the S&P 500 will be above a -1.2% drop by Friday’s close.

Don’t be late to the party – Click Here to see what 4500 Wall Street Analysts say about your stocks.