A half year ago the Bradley was discussed the last time, so in this article I'd like to analyze what has happened in the meantime, present the model for 2007 and also the results of a little study.

The standard model had 5 turning dates since April which produced 3 intermediate-term and 1 short-term reversal, only 9/15/06 didn't mark anything of significance:

1. 4/11/06: 6 days afterwards 4/17 medium-term low resp. double-bottom April 11 and 17, in this case it nailed the turn to the day
2. 5/20/06: 3 days afterwards 5/23/06 short-term low
3. 6/20/06: 7 days before 6/13/06 medium-term low
4. 7/23/06: 6 days before 7/17/06 medium-term low
5. 9/15/06: - (nothing of significance)

The 2 remaining dates 2006 (window: usually +/- 4 calendar days, sometimes up to +/- 1 week) are:

1. 10/11/06
2. 11/28/06

Siderograph 2007

2007:

Next year there are only 8 potential turning points, with the last 4 being more significant (bold letters) than the first 4 (window: usually +/- 4 calendar days, sometimes up to +/- 1 week) :

1. 3/10/07
2. 3/20/07
3. 4/20/07
4. 5/4/07
5. 6/14/07
6. 8/26/07
7. 10/17/07 (most important date)
8. 12/22/07

Some Bradley analysts would also include the "micro-spikes" of the 1st quarter but I strongly advise against that because that's not significant enough and should be interpreted as "white noise". For unknown reasons there are even minor differences between the different software programs that all use the original formula of Donald Bradley. While major turns in the Bradley chart are more or less identical you would get entirely different results if you zoom in too much.

The role of polarity

Often the Bradley is misunderstood and interpreted as if it were able to predict the market ups and downs as displayed in the chart but that's definitely not the case, the following little study refutes this claim. I have already been thinking about dropping the chart altogether and only publish the dates to avoid misunderstandings, however this has the major advantage that the magnitude of a turning point gets entirely lost (among other drawbacks), that's why I continue to release the chart.

The study examined whether the polarity of Bradley reversal dates correlates with the polarity of S&P 500 index turns, i.e. if a Bradley high is also a market high (same for lows). I analyzed the standard model since 2002 (N=34), here is the list including whether the polarity was predicted successfully or not (date format: D.M.YY; H = high, L = low):

(1) 27.1.02 H: incorrect

(2) 11.4.04 L: incorrect

(3) 27.7.02 L: correct

(4) 22.8.02 L: incorrect

(5) 10.10.02 L: correct

(6) 24.11.02 H: correct

(7) 10.1.03 H: correct

(8) 13.3.03 L: correct

(9) 26.2.03 H: correct

(10) 2.7.03 H: incorrect

(11) 14.9.03 H: correct

(12) 21.10.03 H incorrect

(13) 22.11.03 L: correct

(14) 26.1.04 L: incorrect

(15) 6.3.04 L: incorrect

(16) 26.4.04 H: correct

(17) 17.5.04 L: correct

(18) 24.6.04 H: correct

(19) 14.8.04 H: incorrect

(20) 28.9.04 H: incorrect

(21) 25.10.04 L: correct

(22) 27.12.04 H: correct

(23) 25./26.1.05 L: correct

(24) 4.3.05 L: incorrect

(25) 10.6.05 L: incorrect

(26) 28.7.05 L: incorrect

(27) 30.8.05 H: incorrect

(28) 16.12.05 L: incorrect

(29) 15.1.06 H: correct

(30) 3.4.06 H: correct

(31) 11.4.06 L: correct

(32) 20.5.06 H: incorrect

(33) 20.6.06 L: correct

(34) 23.7.06 H: incorrect

conclusion: the polarity was called 18 times (P=53%) and missed 16 times (P=47%). That's almost like throwing the dice, while the results do point in the right direction the deviation from the 50% to be expected by chance is by no means statistically significant, so one can only conclude that the Bradley siderograph does not reliably predict whether a turning point will be a high or a low - only the date matters.