Stock Market Forecast for Monday, 4/14/25

Daily Predictive SOFIS Signal, Equity Signals, Risk Levels, and Portfolios (since 2004)

The Previous Signal

******* For Friday, 04/11/2025 *******

Portfolio Status: Hedged for Friday (protect stock portfolios)

SOFIS Signal: CASH

SOFIS Allocation Level: 0%

SOFIS Critical Periods: (1) 0910-0920 CT, (2) 1245-1305 CT

****************************************

Commentary on the Previous Day’s Signal

For Friday, I had said: “the SPYPRED5 S&P Model 'Rule Chain' is:

041025 Core [ 2/**] +100 (100.00%) >>> [106/22] 0 (100.00%) >>> [153/14] -100 ( 64.29%) >>> [475/15] +100 ( 60.00%)

The Core Rule is now back in the LONG state, but then we have an overriding CASH Rule (#106), followed by an overriding SHORT Rule (#153), and this in turn is followed by a LONG Rule (#475). Although this is technically a LONG result, we still have the mixture of both LONG and SHORT overrides, meaning that the Market is probably roughly balanced insofar as the SPYPRED5 Model can determine. So, we will call this a 'raw' CASH signal. However, the EZ Indicator has dropped to -18, the legacy S&P Model (SYSTEM6) remains in a SELL state, the SURVEY.INP data is very bearish about the tech stocks, the PredTablSigs pattern is SSSS/S, the NN1 neural network remains quite negative, etc. The official signal for Friday is clearly going to be another CASH/HEDGED signal. To top it all off, our long-term signal has just dropped from a BUY to a HOLD once again.”

“Signal Corroboration: The 6-stock Tech Portfolio is now 0.0% Long, while the combined average Long allocation for all 3 stock portfolios (TECH6, SUPER08H, and SUPER15H) has risen to 66.7%. The CASH/HEDGED stance for Friday is thus considerably more conservative than the current/projected risk levels of the stock Portfolios, but this still seems to be justified given the tariff situation.”

The CASH/HEDGED signal for Friday was looking very good until about 1000 CT when the indexes started to turn upwards, obviously triggered by a news item (which I haven’t yet tried to track down). So, it turned out to be a rather good Market day in spite of the neutral/balanced assessment that I had generated and that led to the decision to go with CASH/HEDGED instead of LONG/UNHEDGED. Thus, it was an incorrect prediction — but at least I did not call for a SHORT …

---

The Current Stock Portfolio Strategy

The 3 stock portfolios that I maintain on Collective2, the Tech6, Prime6, and SUPER08F, are designed so that they allocate no more than 80% of available funds on selected stocks. These are always LONG positions. The other 20% is set aside for buying or selling MNQ or MES contracts (approximately 1 contract per $50K of stock holdings), with hedging accomplished in Tech6 and Prime6 by selling 1 MNQ contract, and in the SUPER08F this is accomplished by selling 1 MES contract. Hedging is especially important when the portfolios are maxed out on stock positions, and obviously less so if the portfolios have been reducing their holding size in the face of Market weakness ('cash hedging'), as they are designed to do. Now, the current strategy also calls for 'buying' 1 MNQ or MES contract if several conditions are met: (1) we have a LONG signal from the SPYPRED5 Model, (2) the legacy S&P Model (SYSTEM6) is also LONG, and (3) the EZ Indicator is at least > 0 (positive). This means that we obtain some extra benefit from setting aside 20% of equity, permitting the stock portfolios to exert a small amount of 'leverage' when the Market looks good.

The current Portfolio strategy can thus be summarized as follows:

(1) Tech6 Portfolio. A maximum of 6 high-performance Tech stocks that account for 80% of portfolio value. The remaining 20% will then either stay in Cash (if a weak LONG day is expected), or will be used to provide a hedge (selling an MNQ futures contract), or used to 'boost' performance by buying an MNQ futures contract -- all based upon the SPYPRED5 signal and its EZ Indicator and SYSTEM6 associated signals.

(2) PRIME6 Portfolio. A maximum of 6 stocks that are chosen from a far larger 'pool' (techs, S&P 500, and small-caps). Again, 80% of funds are used to buy a maximum of 6 stocks, and the remaining 20% is used to protect, or to boost gains for a given day, i.e., -MNQ (a hedge), +MNQ (a boost), and $$$ (neutral).

(3) SUPER08F Portfolio. A maximum of 8 stocks from carefully selected companies (that all have been in business since 2002 with only a few exceptions). Although the same 80%/20% strategy is employed, this time with buys or sells of MES (instead of MNQ), the stocks tend to turn over much more slowly so that the trading frequency is quite tolerable. The PORTSIM portfolio machinery is used to guide the trades, rather than using the higher-frequency signals that are output by the SPYPRED5 model. The predictive models, of course, 'are' used to determine how to handle the 20% equity reserve, i.e., +MES, -MES, or Cash.

---

SOFIS Signal and SUPER 8/SUPER 15 Stock Portfolios

[The detailed Forecast for Monday is presented below]