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Once Again DIYQuant System Predicted the Market Reversal

The US stock market has been in a steady decline since the beginning of October. Dow Jones and S&P500 have both dropped more than 7% from their all time highs set in early October while NASDAQ fell 9.95% since the all time high it set in August, briefly entering correction territory again. Overall the market sentiments are still weak despite today's rebound.

Similarly to the success in predicting the February stock marker correction (check out this post),  the decline in the US market in October was predicted by the system and we have sent numerous warning (through our weekly report) to all subscribers since August about the impending reversal. All thanks to the system's market wide analysis of percentage of up trending stocks and the acceleration (in this case is deceleration) of breakout stocks in the system's watchlist (part of the watchlist is shared freely through this blog). You can check out this post that explains what I meant by the percentage of uptrending stocks in the market and the logic behind it's effectiveness to find undercurrent in the stock market, which the indices do not foretell.

Here is the timeline of the posts that were shared in my Facebook private group from August to October prior to the decline together with the annotation on the chart of S&P500. Due to the lengthiness off the posts I shall only share a few of the weekly posts starting from August to October. By the way system is now officially 100% cash. We will be waiting for a reversal uptrend to start loading stocks again.







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  1. I have read your articles many times and I am always inspired by your tips and knowledge. Thank you for sharing. I would love to see more updates from you.

    Shares to Buy

  2. Interesting idea to user breadth to see if the market is overbought. I will try it.
    Wouldn't you worry that in a strongly trending market, overbought can always become more overbought?

    1. Yes market may continue to go up despite being overbought. Irrational exuberance can extend for quite some time. From my backtesting, I have found that it is better to stop chasing the market once the system deemed the market is overheated as the upside potential is limited. However I will still keep those already in the portfolio but stop loading additional stocks.