To answer that question, we asked our Machine Learning-based forecaster what it thought would happen a month ago.
At Lucena Research we use supervised learning to predict the future return of equities and ETFs. Our QuantDesk platform allows us to roll back time and ask “what if” questions. So, we rolled back time and asked it: “Will the market go up or down over the next month?” Here’s the answer it gave:
The vertical line on the right represents December 31, 2015. You can see the forecast at that time, and then the actual market performance as the jagged line going forward. So, indeed, our system was predicting the correction we’re in as of two weeks ago.
We use this forecaster as part of our successful long/short TieBreaker strategy. As of today, January 15, 2016, Tiebreaker is up 4.5% year to date, and 17.8% over the last year. If you’d like more information about our strategies, send me an email.
DISCLAIMER PERTAINING TO INVESTMENT ADVICE: Please note, Lucena is a technology company. Do not take the opinions expressed explicitly or implicitly in this communication as investment advice. The opinions expressed are our own and are based on statistical data analysis. Past performance does not guarantee future success. In addition, the assumptions and the historical data based on which an opinion is made could be faulty. All results and analyses expressed are hypothetical and are NOT guaranteed. All Trading involves substantial risks. Leverage Trading has large potential rewards but also large potential risks. If you are not an investment professional please consult one before risking capital.