Stock Market Forecast for Monday, 6/23/2025

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

The Previous Signal

******* For Friday, 06/20/2025 *******

Portfolio Status: Hedged for Friday

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:

061825 Core [ 3/**] -100 ( 47.79%) >>> [389/ 3] +100 ( 66.67%) >>> [443/ 3] -100 (100.00%)

The Core Rule remains in the SHORT state, but we then have a low-frequency medium-accuracy LONG Rule (#389), which is subsequently overridden by an even less-frequent, but more-accurate SHORT Rule (#443). This gives us a 'raw' SHORT signal. With the EZ Indicator now rather negative at -20, and with most indicators signaling caution, as shown below, we will continue with our familiar CASH/HEDGED signal for Friday.

Let's now examine the overall set of indicators:

These are the major positive factors:

(1) the legacy S&P Model (SYSTEM6) remains in the LONG state.

(2) the CNNI is stable (-0.31 --> -0.33), but remains negative and far from being in LONG TREND territory.

These are the major negative factors:

(1) the SPYPRED5 Core Rule, and Rule Chain gives us a SHORT signal.

(2) the SURVEY.INP prediction data is rather negative at -3 (the range is -4 to +4), with possible strength in the DOW.

(3) the GSI remains very low, and is staying constant, being now at 15.3%. (15.3% of 1000 Grail System stock/ETF signals are in a 'buy' state,)

(4) the EZ Indicator is very negative at -20.

(5) the PredTablSigs prediction pattern is negative (?-/?).

(6) the CBOE Put/Call Skew is pretty high at 148.41.

(7) our long-term signal remains in the HOLD state (see below)

(8) crude oil prices are still rising, obviously in response to the Israel/Iran situation.

(9) our Preprocessor has dropped from a holding of 166 equities to 164.

“So, we have a CASH/HEDGED signal for Friday.”

“Signal Corroboration: The 6-stock Tech Portfolio is now 33.4% Long, while the combined average Long allocation for all 3 stock portfolios (TECH6, SUPER08H, and SUPER15H) has fallen to 52.2%. The CASH/HEDGED signal for Friday is thus still more conservative than the stance suggested by the current/projected risk levels of the stock Portfolios. However,this degree of caution does seem appropriate at the current time.”

Our CASH/HEDGED signal for Friday turned out to be yet another good choice as the Market slumped modestly, with only the Dow eking out a very small gain. And that was all before the US bombed the Iranian nuclear sites, which does not bode well at all for the Market on Monday.

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 TECH6/SUPER 8/SUPER 15 Stock Portfolios

[The detailed Forecast for Monday is presented below]