[ThePythonicCow]

Interesting analysis of stock market futures ... well I find it interesting. An earlier version of this, posted three months ago on FR, under the same title Prediction: The future of the USA stock market, got raving ridicule.

[Timesink]

How rich have D. Sornette and W.-X. Zhou become off their analysis?

[Drango]

I've got a lot of lint in my navel.

[Lazamataz]

You make it seem like stock market analysis is all about math or something.

[novacation]

This is all very interesting, but trying to predict the stock market by graphs and patterns will never work. They forgot to take into account that Americans are basically bullish in their soul, willing to take risks, willing to work very hard to succeed,inventive,and have more ideas than any other nation.Add greed and the will to be number one and the graphs blow up. I don't see much point, but it was a nice academic exercise.

[kms61]

My prediction for the US stock market: it will be outsourced to India.

[djf]

My personal prediction:
Dow, 7500-7700 sometime in mid-October

Very bad Christmas season, Dow 5500-6000 by Feb 1.

[FairOpinion]

Looks interesting, but it's too late for me to think tonight, I'll review it tomorrow. Thanks for posting it.

Whether or not I will end up agreeing with it, it's still interesting.

[Fresh Wind]

If the good professors' predictive methods are valid, they should be able to withstand testing in which all market data after some arbitrary date in the past is ignored, and "predictions" made from that point. Those predictions would then be compared with the actual data.

For example, if Jan. 1, 2001 were taken as a starting point, would these methods have been to predict the behavior of the market between then and today?

What about 9-11 you say? Proponents of these rigorous technical analysis methods would say that if 9-11 had not happened, "something else" would have. Or, nothing, for that matter. To them, the market operates as it pleases, while the fundamentalists fit real world events to the market after the fact. The tail wags the dog, in other words.

I also notice the fractal image on the book's cover. It's not clear what they mean to imply by the choice of this pretty picture, but it should be noted that "fractal behavior" (i.e. nested waves and cycles) can disappear at the most inconvenient times as the system shifts into a chaotic mode, or into a totally different wave/cycle pattern.

[norwaypinesavage]

On average, the market has gone down for the last three years. Mathematical models using just this data will predict further declines.
On average, the market has gone up for the last ten years. Mathematical model using just this data will predict further increases.
Thousands have attempted to use past data to predict future performance. They have had no better luck than they would have had flipping a coin.

[ThePythonicCow]

Aha - after a nights sleep, it seems obvious what this pattern is showing us: deepening involvement.

Have you ever followed behind a big truck and noticed that you could tell how heavily loaded it was, by the frequency of its vibrations when it went over bumps. A backend that wiggles quickly is a sign of a lightly loaded truck; a backend that moves ponderously is a sign of a heavily loaded truck.

What we're seeing here is a market moving with increasing ponderousness. More and more of the economic and financial markets are getting caught up in the pattern, causing the waves to run deeper, run slower, over time.

If the pattern continued unabated, then it would lead to the premature implosion of the Universe. I suspect that we have unanimous consent here that this pattern won't continue that far. So now we're just disagreeing on when the pattern will break down, cease applying to reality. Last month, next year, next decade, it never applied in the first place; pick a number, place your bets.

Some of my colleagues (I'm in Silicon Valley high tech) got caught up in the ".com" boom of the late '90s. They have already washed ashore, in the waves of the last three years. I'm in the tech boom of the last couple decades; my boat is taking on water, but still afloat, though we have had to throw alot of stuff (and jobs) overboard, to keep it from sinking already.

Many folks on FR have not yet gotten any closer to this storm than musing over the evening weather report showing rain and wind in far off lands.

But, back to this model, what it is showing that in a post bubble market, the collapse cuts increasingly deeply into various associated markets, moving bigger and slower as it gains mass.

Until one day, some other pattern begins to take hold. But this model doesn't help us identify that day, so far as I can tell.

[verity]

Most of the charts are upside-down. ;~)

[Constitution Day]

BTTT (later... later)