An Excel Forecast: Can S&P 500 Monthly Closes Predict the Future?

Out of curiosity, I was thinking if Excel could forecast the stock market.  We know Excel’s Forecast is a function of making predictions by using the historical data and analyzing trends.  Can the S&P 500 historical data shed some light on the future?  Maybe or maybe not.  I would like to think so because the price movement follows a pattern – when it gets too expensive, the price comes down, or vice versa.  The equilibrium price is the price that buyers and sellers agree.  Timing is something we can not predict.

I took the S&P 500 monthly closes from Yahoo Finance from 3/1/2010 to 2/12/2021 and put them in Excel.  Here’s what Excel forecasts.

Ignore the timing factor even though it predicts an immediate sharp pullback of the S&P 500.  However, the long term outlook still looks rosy.  

The bigger question is whether S&P keeps going up from this point and then starts a major correction later this year or next year, or is a major correction imminent?

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