Market Forecasting & Prediction Models

What the Forecast Provides

Our intraday forecast system provides actionable intraday price levels and directional probabilities. The system generates high-of-day (HOD) and low-of-day (LOD) ranges for both bullish and bearish scenarios, plus calibrated directional probabilities to quickly identify the day's scenario and set up trades appropriately.

What We Forecast

We can forecast any equity but focus on instruments with high predictability with 0DTE options—primarily indexes and index ETFs.

Primary coverage:

• SPY/SPX - S&P 500
• QQQ/NDX - NASDAQ-100
• IWM/RUT - Russell 2000
• DIA - Dow Jones Industrial Average

Directional Probability: Trade Setup

The forecast provides calibrated directional probabilities. When the model predicts 77% probability of a green close, the market closes green over 77% of the time. This calibration lets you quickly identify the day's scenario and set up trades appropriately.

At 55% probability—essentially a coin flip—the directional call provides no edge until a level breaches. In this regime, red HOD will breach frequently and still close green, but when green LOD breaches, the probability of a red close doubles. This information makes it very easy to choose legs directionally or in a strangle. At 77% probability, you have directional conviction. The directional probability determines your approach; the intraday levels determine your execution.

Example Trade: December 18, 2025

Forecast at Open:

• Green probability: 77.5%
• GHOD: 680.93
• GLOD: 673.62
• Previous close: ~671
• Open: 677.60 (massive 6.60 point gap up)

Trade Execution:

1. Enter 674 puts at $0.64 (just above GLOD) - hedge leg at open
2. Gap unwinds, SPY drops - puts climb to ~$1.25 (+95%)
3. Enter 680 calls at $0.38 (just below GHOD) - directional leg on reversal
4. Market recovers to 680.31 (right at GHOD)
5. Exit: Puts at $0.21, Calls at $1.41

Results:

• Entry cost: $102 ($64 puts + $38 calls)
• Exit value: $162 ($21 puts + $141 calls)
• Time: 1 hour
• ROI: 59%

The "I Don't Care" System:

• Puts captured the gap unwind (+95% peak)
• Calls captured the recovery to GHOD (+271%)
• If GLOD (673.62) had broken instead, puts would have delivered 500% returns
• Total risk defined at entry: $102

On strong green days, GLOD typically isn't tested.

Unique Market Conditions:

December 18, 2025 was unusual - the day before triple witching (December 19: index futures, index options, and stock options all expire), and SPY goes ex-dividend. These conditions can create atypical price action, and in this case it did with a full retrace plus extension of almost 13% on the first move.

Second Trade Entry (12:10 PM):

After closing the initial position at 59% ROI, Otto re-entered on a price stall:

• 680 calls at $0.55
• 676 puts at $0.42 (just above GLOD 673.62)
• Entry cost: $97 per strangle (6 points wide)

Target: 1 standard deviation above GLOD

Trade Management:

• 680C closed at -65% (market reversed from GHOD)
• Added 679C at $0.28 based on VIX/1d over 14 and VIX climbing back over 17
• Strangle constricted from 6 points to 3 points (679C/676P)
• Current status:
  • 676P: +301%
  • 679C: +16%

Key Insight: This capitalizes on options force and market mechanics. The 77.5% green forecast failed at GHOD. The put position captured the reversal while constricting the strangle adapts to the new price structure.