Pattern Analysis

7 Horns' market-wide read of the CNN model's price predictions: it scores how bullish or bearish the predicted moves are across a basket of tickers and rolls them into one overall market signal.

Pattern Analysis is a technical market-breadth indicator that aggregates individual machine-learning price predictions across a broad basket of stocks into a single, unified market signal. By analyzing the direction, magnitude, and consensus of predicted price movements from a convolutional neural network (CNN) model, this tool assesses whether the broader market is displaying a collectively bullish or bearish posture. It helps retail investors cut through the noise of individual stock fluctuations to see the prevailing trend across a curated universe of large-cap equities. To calculate this signal, the system evaluates the latest model forecasts for each ticker in the basket, categorizing them into expected upward or downward moves. It then measures the strength of these predicted moves and checks for alignment with the S&P 500 (SPY) ETF. Because the analysis is recomputed live using the most recent model predictions, it provides a real-time reflection of market sentiment rather than a lagging historical average. Investors use Pattern Analysis to gauge market-wide momentum and identify potential trend reversals or continuations. A high, positive reading suggests broad-based bullish alignment across many stocks, indicating a healthy, participation-led rally. Conversely, a low or negative reading suggests widespread bearishness. A key pitfall for investors is relying solely on this aggregate signal without checking individual stock catalysts, as a few highly weighted or highly volatile stocks can sometimes skew the perceived consensus if the underlying model's confidence levels vary.

Out of a basket of 100 large-cap stocks, the CNN model predicts that 75 stocks will move upward over the next target period with an average predicted gain of 2.0%, while 25 stocks are predicted to decline by an average of 1.0%. The Pattern Analysis aggregates these inputs to show a net positive consensus of 75% bullish alignment, signaling a strong market-wide buy sentiment.