We have developed a stable of proprietary models that track the S&P500 (SPX) with a high correlation. In this piece, we demonstrate four of these models.

The Repo Model has a positive correlation with the SPX on a 1–3 week time lag. The model made a local low (green box) a couple of weeks ago which means the SPX should make its local low in the next couple of weeks (chart below).

The chart below, shows two models: the Liquidity Model, and the Reserve Model. Both models show weakness going into the second week of April.

Our newest model is the Liquidity/Sentiment Model. It shows a strong positive correlation of 0.75, and the last three times that the correlation flipped negative (black-ovals) and the SPX diverged from the model, a pullback in the SPX followed a month of two later. January had a divergence, and the model is currently over-extended which implies that the SPX is close to a local-high (chart below).

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