Incredibly accurate S&P 500 stock market model forecasts huge end to 2022

Each year leading Florida-based investment research firm, Ned Davis Research, produces an S&P 500 stock market forecast model, known as the NDR Cycle Composite.

Provided to Ned Davis Research clients towards the end of each year, the model forecasts the week-by-week moves of the S&P 500 for the year ahead.

It has a very sound track record, and is a reason why the firm has become one of the most respected in the U.S.

However, the NDR Cycle Composite for the S&P 500 in 2022 has been attracting a lot of attention lately.

It has proven incredibly accurate, and to date, is one of the firm’s most precise models in its three-decade history.

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What is the model forecasting for the S&P 500 in the remainder of 2022?

For the stock market bulls, it’s good news.

Here’s approximately where we are today on the 2022 NDR Cycle Composite.

S&P 500 stock market model 2022

If the model’s accuracy to date is anything to go by, there’s significant upside for the S&P 500 in the remainder of the year.

How is Ned Davis’ S&P 500 modelling formulated?

According to Ned Davis Research, the firm’s research approach blends both fundamental and technical disciplines.

Its annual Cycle Composite models for the S&P 500 use a rather novel approach. As the name suggests, the model’s forecasted stock market path for the year ahead is derived from a composite calculation of market moves over four key cycles.

They are:

  • A one year ‘seasonal’ cycle.
  • Four year U.S. Presidential cycle.
  • 10 year ‘decennial’ cycle.

BWM Financial provides a sound overview of the rationale behind each of these cycles in this article.

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