Every year Money Morning comes out with our forecast that predicts the market action for the next 12 months.
It's built on a system that Chief Investment Strategist Keith Fitz-Gerald spent over 10 years perfecting. He calls it the "Geiger Index."
Based on "fractal theory," it's similar to models used to predict hurricanes, interpret digital satellite data and even avert cyber attacks. It works by looking for patterns so complex they are beyond traditional analytics.
The amount of raw data this program crunches is extremely large. In fact, it takes a series of computer servers 14 hours to produce a forecast that covers the next 12 months.
Keith's system is also highly accurate. Since inception, the Geiger Index has achieved a remarkable 92.2% success rate.
Just last year for instance, the Geiger Index correctly forecast the movement of the S&P 500 right down to the month. According to last year's forecast:
And as Keith noted in late 2011, "Dips will generally be buying opportunities." Looking back, they certainly were.
So what does Keith's Geiger Index forecast predict for 2013?
I've put together the entire projection in one simple chart along with Keith's key takeaways for the year below.
First, let me explain the chart. Using market data from around the world, it projects the market forward in 2013 using the S&P 500 as a proxy.
What's important is the yellow line. It marks the projected pattern that the Geiger Index "sees" for 2013.
What you notice from the projection is that there will be a gradual run higher into late Q1/Q2. Over this time frame the S&P 500 will likely peak for the year.
After that, the Geiger Index predicts that the markets will soften considerably going into Q3. Knowing these moves in advance will be key.
According to Keith, "the selloff is going to test everybody's patience, but the good news is that it shouldn't last too long."
Beyond Q3, the Geiger sees momentum building into Q4. That potentially includes a sprint into year-end that's similar to what we just experienced at the end of 2012.
As you might suspect, there are a couple of key takeaways when it comes to your money.
According to Keith:
We'll be sharing more specific looks at some of the more popular asset classes in the weeks ahead, including gold, oil and even some of the media darlings like Apple, Amazon and Home Depot. So stay tuned.
In the meantime, though, let me leave you with one final thought.
What's critically important is that you take the time to develop a plan that will allow you to easily adjust your tactics to changing market conditions.
Armed with information provided by the Geiger Index, it's easy once you can tune out the noise. Consistent gains are absolutely possible when you understand what's probable.
To learn how you can take direct advantage of the Geiger Index - and join in our 4-year anniversary celebration of the Geiger's astounding track record, starting today, just go here.