Bradley Model Predicts Turns in the Market

Although the Bradley Model has been amazingly accurate in recent years in predicting turns in the market, it is less accurate in predicting the direction of the turn. Note the following excerpt in AMEInfoFN by Dr. Marc Faber, world-renown for his investment insight. In an March 2006 article, he said

“The second reason for being cautious about the US stock market is that the Bradley Model, which is based on planetary alignments, will shortly turn down. The Bradley model correctly called the current rally by bottoming out in December 2005, and will turn down again in November 2006. And while I would certainly not bet my farm on the basis of the Bradley model, its record compares rather favorably with the forecasts of Wall Street strategists and analysts.”


As Dr. Faber states, the Bradley Model predicted a turn in December 2005. His reference to an upcoming turn in the market was in reference to the Bradley Model’s upcoming turn in May 2006. See the chart below Bradley Model 2006. The market topped in May 2006 and bottomed in June-July 2006 before turning upward. Note that the model turns steeper at the end of July 2006. Although Faber initially thought the market would be bottoming by November 2006, his caution on the market should be heeded because the Bradley Model turned in November 2006. Since it has gone up since the last turn point, this turn will more than likely be down.