Friday, November 4, 2011

2011.11.04 Weekly DJIA Long $ Short Term
































Today, the model converged within a couple of minutes, and with a better fit after chugging all night to converge yesterday.  I am still expecting a major correction with a steep downward slope, maybe in the next week or two,  if the model is working out.

Since these cycle models try to adapt to new data, the predicted turning points may change with time, so it is helpful to look back at earlier models to get an idea of model behavior.

Visit econocasts.net for free sample trading model downloads. 

8 comments:

El Viejo said...

Interesting graphs based on resources:
http://ourfiniteworld.com/2011/10/24/2012-reaching-limits-to-growth/

Paolo said...

ElViejo, I'm surprised that Cesare Marchetti's work on sigmoid modeling of resource growth and decay is not referenced, though there is some nice information on the site. Perhaps I missed it during my perusal of the site.

Paolo said...

And in case anyone is wondering - the DJIA cycle model converged immediately on EOD data for 20111108. I'll try to put up a mid-week update today after crunching the EOD data.

El Viejo said...

This could be IT!
http://www.zerohedge.com/news/game-over-reuters-says-germany-france-exploring-idea-core-euro-zone-end-existing-structure

Paolo said...

You might be right! What is funny is that while a cycle model does not take into account events such as this, events seem to happen at around the right time. As I recall, Europe was not doing too well either during the last Great Unpleasant World Market Correction. I wish I had more time to study that phenomenon, not so much from the mercenary standpoint, but just out of curiosity.

El Viejo said...

Here's a cycle for U Paolo:
In 1929 we had 2009 style Deflation. 40 years later in 1969 we had the opposite(Inflation) and then 40 years later 2009 Deflation again. It seems producers and consumers are out of phase and oscillating. In the 70's advantage to consumers (young boomers) In 2009 advantage to producers and boomers are retiring (less consumption).

Paolo said...

One of the major non-fractal cycles the model coughed up was about 88 years. So that fits right in - 44 years +/- between inflation and deflation. Also about the length of a lifetime. Which makes me wonder about the different relationships serial generations have with money - savers - those who lived through deflation, and spenders - those who lived through inflation.

Some of the cyclical behavior might also be due to the lag time between gauging the market needs at a point in time, and the actual production - resulting in mismatches between supply and demand. Sort of like those cute predator/prey cycles to teach ecology to children which occur because the time required for reproduction of rabbits is much lower than the for the reproduction of foxes.

El Viejo said...

Ha,
That is very interesting about the differences in generations!