Sunday, October 30, 2011

Market Predictions for 2012 based on Trends

Last week, I reported Bloomberg Consensus of Predictions for Year-End 2012 in Where are Markets Headed for 2012 ?

That was their average forecast:
  1. S&P 500: 1,428 vs Current: 1,229
  2. 10-year Treasury yield: 2.86% vs Current: 2.14%
  3. Inflation rate: 2.05% vs Current: 3.9%
  4. Unemployment rate: 8.7% vs Current: 9.1%
  5. GDP growth in fourth quarter: 2.5% vs Second quarter, 2011: 1.3%
  6. Gold price per ounce on Sept. 30, 2012: $1,835 vs Current: $1,704
  7. Value of euro: $1.40 vs Current: $1.39
  8. S&P/Case-Shiller 20-City Composite Home Price Index: 136.6 vs Current: 142.8
  9. Barrel of oil: $95 vs Current: $92.58
Today, I'm going to do forecast for the same metrics in a "dumb" way by simply checking the trends on charts and give an estimate for each items and we'll see how it fares end of December 2012:
  1. S&P 500: 1000
  2. 10-Year Treasury yields: 2.5%
  3. Inflation Rate: 2.5%
  4. Unemployment Rate: 8.8%
  5. GDP Growth Rate: 1%
  6. Gold Price: 1850 USD
  7. Euro: 1.37 US dollar
  8. S&P Case-Shiller 20-City Composite Home Price Index: 135
  9. Barrel of Oil (WTI): 125 US dollar
Sometimes I took the long term trend (e.g. 10 year on gold) and other times shorter trends (e.g end of 2008 to now for oil).

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