Forecast Friday 📈
4Lights 15 Day Forecast: 🐂SP500 ▲+0.3% | 🅱️BTC ▲+1.3% | 🏛️10Yr Treasury Yld ▼-0.6% | 🚨VIX Volatility ▼-4.5% | ⚜️Gold ▼-0.8% (as of 2/21/25)
Friday was a rough day, so I figured it was time to fire up the model again:
The S&P500 got crushed on Friday. Some bad economic data, plus the realization that inflation is no longer moderating (eggs!), is likely starting to weigh. The big question is if this is just an excuse to take some profits, or if this is the start of a bigger downtrend (notice the 50-day moving average is rolling over a bit)… Unfortunately, the model isn’t finding a lot of good historical comparison periods to analyze and has low confidence.
Bitcoin is interesting here. It hasn’t been able to stay above $100k for long, but it seems pretty resistant to falling below $90k. If it does move higher, it is likely to >+5%.
The 10-Year Treasury Yield definitely appears to be in a slight down trend after launching back up to nearly 5% in January. Even though the model can find a lot of good historical matches to the latest trading movement, those time periods resulted in fairly symmetrical outcomes. In other words, the model thinks it’s 50/50 whether or not yields will be higher or lower in the next 15 days. Market expectations of inflation are on the rise.
The VIX Volatility Index again spiked on Friday, but the model didn’t find a lot of good matches. The VIX has remained somewhat elevated since last August.
Gold 🪙 looks like it is taking a pause over the short-term, but I think gold’s longer-term prospects are still good, and so do many central banks. “Peace” deals are in the headlines, but I fear abandoning Ukraine only emboldens aggressive nations to be more aggressive (which is bullish for gold).