Week 7 results: high precision, lower accuracy

The results for week 7 are out. They are slightly less accurate than the first six weeks (see the first 6 weeks here), but are still on very good track. With yesterday’s market rally of both the S&P and the Dow, we can even say that our prediction was a day too early, as the Monday closes were almost spot on with our Friday predictions - i.e. our investors/predictors saw the rebound a day too early.

Still, our prediction was for Friday, and this marked the first week where the results are not accurate within a single percentage point for the key indices, and the first time we’re missing direction for the S&P and the WTI oil price (shown in the table below). However, we are still falling within the wider confidence indicators (3% instead of our usual 1%).

Our week 7 predictions, sent to our readers on Wednesday were as follows:

And here’s the table with the final comparison for the Friday close, and an added table for the Monday close (that shows much greater precision, but lower accuracy):

The direction for almost all indicators was that they would end up lower, except for oil prices (slightly higher) and the S&P500 (bounce back to where it was on Monday). In other words, our survey participants predicted a rebound in both the S&P and the Dow by the end of the week after the FOMC meeting, but with the Dow still staying a bit lower than its Tuesday open. This rebound happened a mere day later - on Monday close instead of Friday close. The same happened for oil and the T-bill, while the cryptocurrencies continued their decline.

Missing by one day can be important if you have a short-term options strategy expiring on Friday of the same week, but other than that, we can say that our precision was good, but accuracy slightly off.

Investment strategy

In each case our predictions seem to fall within a very narrow 97-98% confidence interval, even when they are a day too early as it happened this week.

A possible investment strategy, for those that wish to give it a shot (see disclaimer below), is to play a condor or butterfly options strategy expiring in the same week, where the confidence intervals act as upper and lower boundaries of the spread. We will be posting the results of this strategy as well.

DISCLAIMER: This prediction survey is still in its testing phase. Neither the survey nor its results act as investment advice of any kind, nor should they be considered or interpreted as such. The results of the survey need not correspond to actual market preferences or trends, so they should be interpreted with caution. Oraclum bears no responsibility for your investment choices based on these predictions.