This is the follow-up discussion for “Article #2 Forecasting the S&P500 emini 60min chart”, if you did not read that article you should read that first to help understand this discussion.
MarketWarrior 5 makes an automatic forecast for the S&P500 emini 60 minute chart. On all of these charts, I am using the DTN IQFeed symbol @ES#. The 60 minute forecast covers the current week from Monday to Friday. When using the 60 minute forecast, I review the forecast once a day. I review it usually in the morning before the main trading session opens, and if the forecast is accurately identifying the Change In Trend (CIT) points, I leave the forecast as it is. If the forecast has diverged from the market action, then I recalculate the forecast. The forecast does not automatically recalculate. Normally I will recalculate the forecast no more than once a day before the main trading session opens.
The chart below shows the automatic forecast, which was calculated at 7:00 AM on Wednesday June 3, 2015. This chart runs through 8:00 AM Thursday June 4, 2015. When I reviewed the forecast in the morning of June 4 before the main trading session opened, the forecast had accurately identified the CITs labeled (1) and (2). The CIT (1) occurred in the previous day and CIT (2) occurred in the early morning hours. Because this forecast was continuing to accurately identify market turning points, I did not recalculate the forecast.
The next chart shows how the forecast worked out for Thursday June 4, 2015. The automatic forecast had three CIT on Thursday, June 4. I have labeled these (2), (3) and (4). These CIT points were all accurate. The chart below runs through Friday June 5, 2015 at 6:00 AM. When I reviewed this chart on Friday morning before the main trading session opened, I saw the forecast was continuing to identify CIT points so I did not recalculate the forecast. There was now only Friday left in this forecast.
You can see below how the forecast worked out for Friday June 5, 2015. The end of the forecast on Fridays sometimes does not get labeled because there is no significant CIT as was the case on the Friday seen below. We will be correcting that in a future release so the Friday end point is always labeled with the forecast time and price.