Josh Enomoto

Sat, Jun 21, 2025, 7:30 AM6 min read

Here’s a question you may have wondered about: if meteorologists frequently provide five-day weather forecasts, how come market analysts (within reason) don’t do the same for the equities sector? Granted, human behavior can be irrational at times and black swan events by nature are unpredictable. However, on the whole, humans generally think in predictable manners.

At first glance, the problem should be easy to address. When forecasting weather, meteorologists utilize ensemble models, historical simulations and probability distributions. By converting the applications toward the equities space, market analysts can assess the three main factors that meteorologists use for the weather:

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• Define what event they’re modeling for

• Determine when said event might occur.

• Calculate how likely the event will materialize based on past analogs.

Unfortunately, both fundamental and technical analysis runs into a major structural wall when addressing past analogs. In both cases, the measurement metric is non-stationary; that is, the metric changes (often wildly) across time and context. For example, the share price for a hot growth stock may be vastly different from what it was ten years ago and the same can be said about its valuation ratio.

With such discrepancies, past analogs are effectively impossible to calculate — unless you impose stationarity on the target dataset.

This is the core reason why I’ve been focused on market breadth, which are sequences of accumulative and distributive sessions. Market breadth is a representation of demand and demand is a binary construct — it’s either happening or it’s not. As such, it’s easily categorizable and quantifiable, thus facilitating probabilistic analysis.

Just as importantly, market breadth sequences are falsifiable. Anyone can peer review my work and arrive at the same conclusions. The same cannot be said for certain methodologies, such as interpretive chart patterns in technical analysis.

Because of the falsifiability of demand profiles, I’m able to filter out statistically intriguing ideas among hundreds of stocks. Below are three names to watch closely this week.

With the closing bell on Friday, Chipotle Mexican Grill (CMG) ended the session up nearly 2%. For the week, the security gained just under 5%, potentially reflecting a sentiment shift. It would be a welcome change of pace. Since the beginning of the year, CMG stock has dropped 12.47%.