Does Historical Analysis Improve Market Forecasts?

The economic calendar is normal in another week split by a holiday. Many market participants will not show up until Thursday – and perhaps not even then. The ISM reports, manufacturing and non-manufacturing, are both post-holiday. My guess is that the financial media will continue the attention to 2020 outlook ideas. Some reporters will take a look instead at events from the past decade. This raises a good question for our consideration:

Does analyzing history improve our market forecasts?

Last Week Recap

In my last installment of WTWA, I accurately predicted continuing discussion of 2020 outlook from some names and faces that are not as familiar to the investment community. That was pretty easy. There was discussion of my theme, complacency, since that is a popular way of describing the market.

The Story in One Chart

I always start my personal review of the week by looking at a great chart. This week I am featuring the version from If you check out the interactive chart, you can see the related news sources and add your own indicators.

The market gained 0.6% for the week. The trading range was only 0.7%. The media portrayed this as a “grind upward,” and I suppose that is technically correct. Not much was happening. Daily volume was less than half that of the prior week. You can monitor volatility, implied volatility, and historical comparisons in my weekly Indicator Snapshot in the Quant Corner below.


A philosophy professor was concerned about poor student performance. To test an idea, he offered extra credit to students who would give him their cell phones for nine days and then write about the experience. I cannot summarize the results without spoiling the story, but please make your own guess about what happened before reading it. The original experiment was in 2014. Last year he repeated it in a different environment. There was a dramatic difference in the results, but again, not what you might think. (MIT Technology Review).