Stock Market Forecast for Thursday, 4/17/25

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

The Previous Signal

******* For Wednesday, 04/16/2025 *******

Portfolio Status: unhedged for Wednesday

SOFIS Signal: LONG

SOFIS Allocation Level: 100%

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

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Commentary on the Previous Day’s Signal

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

041525 Core [ 74/67] +100 ( 56.72%)

The Core Rule remains in the LONG state, but there are still no overriding Short Rules. This gives us a 'raw' LONG signa, and with the following as corroboration, we are generating a LONG/Unhedged signal for Wednesday:

- EZ Indicator is +0 (at least it’s not negative

- Legacy S&P Model (SYSTEM6) is LONG

- The CNNI is slightly higher and the MRI is > 0.

- The GSI is fractionally higher, and remains > 90%.

“Signal Corroboration: The 6-stock Tech Portfolio is still 0.0% Long, while the combined average Long allocation for all 3 stock portfolios (TECH6, SUPER08H, and SUPER15H) remains at 66.7%. The LONG/UNHEDGED stance for Wednesday is thus in line with the current/projected risk levels of the stock Portfolios, and it is clear that it is weakness in the ‘techs’ that is the major problem.”

Between President Trump’s tariff activities, and Jerome Powell’s commentary on them, the Market is pretty much broken at the moment. Certainly, my predictive accuracy has been pretty spotty since the tariff situation became the primary driving force behind Market movements. On Wednesday the Market moved lower in 2 stages, first during the night based upon developing tariff news world-wide, and then in the early afternoon when Jerome Powell began to speak.

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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.

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SOFIS Signal and SUPER 8/SUPER 15 Stock Portfolios

[The detailed Forecast for Thursday is presented below]