Guru Grades

Carl Swenlin's Technical Windsock (Last Updated 3/6/10)

As suggested by a reader, we evaluate here forecasts for the overall U.S. stock market from the commentaries of Carl Swenlin since January 2006. Carl Swenlin "is a self-taught technical analyst, who has been involved in market analysis since 1981. A pioneer in the creation of online technical resources, he is president and founder of DecisionPoint.com, a premier technical analysis website specializing in stock market indicators, charting, and focused research reports." The chart below extracts those highlights from his commentary most indicative of the direction of the overall U.S. stock market and shows the performance of the S&P 500 index over the 5, 21, 63 and 254 trading days after the publication date for each item. Red plus (minus) signs to the right of specific items indicate those the market subsequently proves right (wrong). We conclude that:

• Carl Swenlin covers a range of financial assets in his commentaries, including stocks, gold, the dollar and oil. We focus here exclusively on his forecasts regarding the broad U.S. equity market.
• We skip those commentaries that offer no testable forecast for the overall stock market and those in which the forecasts are especially vague or conditional.
• Mr. Swenlin emphasizes trend-following indicators and investor sentiment in developing his market outlook. We focus on his qualitative insights rather than the mechanical outputs of his trend-following models.
• Based on the frequency of his commentaries (weekly or biweekly), we emphasize relatively near-term stock market behavior in grading his forecasts, unless he explicitly cites some other forecast horizon.
• Several of his complex forecasts proved to be about equally right and wrong, so we evaluate them with "0" and grade them both right and wrong.
• Based on subsequent stock market performance and our judgments about his forecasts for overall stock market direction, Carl Swenlin has been right 58% of the time, which is pretty good. His forecast sample size is low to moderate, as is our confidence in this conclusion.

In summary, Carl Swenlin's emphasis on technical trend-following has resulted in a pretty good stock market forecasting record since the beginning of 2006. Confidence in this conclusion is low to moderate.

See Guru Grades for a snapshot of the accuracy of various experts in predicting the U.S. stock market, including links to evaluations of the commentaries of other individual market pundits and gurus.