Down goes the Dow

Giles Corey wrote:

Racket wrote:

We've heard countless stories over the past few years about how many Americans are living paycheck to paycheck, time to find out if that was legit or an exaggeration.

You don't know this?

Let me guess, you believe in the coronavirus pandemic narrative...yet question if millions of Americans live paycheck to paycheck?

You live life with blinders on do you?

Hey man, really hope you're getting the care and treatment you need during these hard times. Severe mental health issues are nothing to be ashamed of. Keep taking your medicine and just take it one day at a time OK? :)

Racket wrote:You really need to look into GBM and Levy processes

Racket, do your friends and family enjoy smarmy know-it-all comments? You remind me of a bit in a John Mullaney stand-up special (the one with the horse in the hospital gag; look it up, anybody that hasn't seen it), about the kid who declares after midnight at the sleepover something inane about it being tomorrow, not today, and Mullaney's retort was "just because you're accurate, does not mean you are interesting." It seems the sentiment applies here... :-)

For those who would like to know where the naive estimates in the previous post came from, they are straightforward percentile rank daily change values as experienced over ~ 17000 trading days between ~ 1950 and 2017. In so much as a frequence-frame probability estimate is possible for chaotic phenomena, this yields a reasonable first estimate.

fisky wrote:

fisky wrote:

SP500 set to open 3030 as I type this. A close at that level would be a bullish signal. My work from home stocks are lagging now. I'm thinking about selling them and moving to something like Ford. I missed DAL. I had hoped to buy Monday at 23 but it's up to 27 already. Missed the move by one day.

I sold most of my work at home stocks and some laggards yesterday once it appeared that the market would close above 3000. I think the next resistance will be the SP500 all time high. I anticipate the SP500 will approach that level in June. I'll be more comfortable with that forecast if the SP500 closes above 3000 today and tomorrow. I'm curious what other posters think will benefit in the next up move... if this is an up move.

I would say this extension is tenuous. 94 components are above their 50 Day Moving Average. The NASDAQ as noted has underperformed the last couple of days. Yesterday the NASDAQ mid-session was down as much as 2%. That is a notable change in tenor. Either the other 406 components (firms that are likely to have challenged earnings) participate in a big way or the leadership sees increased multiple expansion (overvalue).

Technically, I see the rally filling large gaps created by the rapid decline. Fundamentally I see institutions promoting and Administration promoting headlines that are weakly supportive of this rally. Largest moves come during thin trading. No doubt this Bear Market rally is impressive and historic. No market has ever been so divorced from fundamentals as today.

2.123 million jobless claims. More than estimated. Find a reason to rally?

Ghost of Igloi wrote:... this Bear Market rally is impressive and historic. No market has ever been so divorced from fundamentals as today.

Igy, I think you're confused about the definition of a bear market? You can't wish it or imagine it to be so, it actually has to occur, with index values 20% below recent highs. At yesterday's close, SP500 is just a hair over 10% off all time highs. Maybe your perspective is divorced from reality?

You remind me of a standard undergraduate : "I took a 101 intro class on this subject so I think I have a pretty good idea of what I'm talking about here."

For those who would like to know, this isn't how it works. There are two mainstream models for modeling stock prices : GBM and alpha stable processes. Next time you should put a disclosure on your prediction : "I basically flipped a fvcking coin so here ya go!"

Racket wrote:

Giles Corey wrote:

You don't know this?

Let me guess, you believe in the coronavirus pandemic narrative...yet question if millions of Americans live paycheck to paycheck?

You live life with blinders on do you?

Hey man, really hope you're getting the care and treatment you need during these hard times. Severe mental health issues are nothing to be ashamed of. Keep taking your medicine and just take it one day at a time OK? :)

Oh, snap!

Racket wrote:For those who would like to know, this isn't how it works. There are two mainstream models for modeling stock prices : GBM and alpha stable processes.

Here's when I ask you to provide your better estimate...

the idiot wrote:Here's when I ask you to provide your better estimate...

This time I insist (so much as such a thing is possible on a message board). Tell us your expectation / prediction / forecast for the market today, and provide whatever rationale you'd like to share.

the idiot wrote:

Racket wrote:For those who would like to know, this isn't how it works. There are two mainstream models for modeling stock prices : GBM and alpha stable processes.

Here's when I ask you to provide your better estimate...

No. Why? Because it's complicated and involves a lot of time and math which I don't feel like setting up in R right now, and unlike you I don't pretend to trivialize the matter because I have at least a tenuous grasp of the problem even though I've never liked this area of math.

The easiest way would be to run a bunch of geometric Brownian motion Monte Carlo simulations based on the average expected return and volatility of the SP500 to generate a log-normal distribution. Of course, selecting a value for volatility and expected return depends on your time frame and other factors. Setting up a Levy process would be much more involved but many argue it's more realistic of actual stock price movement.

If you're gonna parade a bunch of glorified Excel functions as "predictions," then you should do a better job of making sure people understand you've drastically reduced the problem to only it's most basic components. All you've accomplished is what appears to be, what, some mediocre exponential smoothing of a time series? If that?

And this is all not even considering the minuscule value of essentially saying "well I predict stocks could go up today. But they could also go down. Also, they might be flat."

On a side note : long on FB. I've been trying to buy rare car parts for an old Audi and FB marketplace is the only place in the world I can seem to find them. Just boomer things I guess

Racket wrote:No. Why? Because it's complicated and involves a lot of time and math which I don't feel like setting up in R right now...

No Racket, the reason is because it's not possible. You can generate whatever distribution you like to match the data as best you can, but you can not produce better "predictive power" than one can get from a simple examination of the process itself (the past data).

You will not produce a "better" prediction not because it's too hard or you are too lazy, but because it's not possible.

Predicting what will happen in the market today (or any day) is a fool's game, which was the whole point of what I wrote (which basically boils down to the expected change is ~ 0, with a slight edge to a gain instead of a loss).

You, like many / most linear thinkers, seem to imagine that mathematics on their own provide a perfect basis for determinism. Mathematics are beautiful, and they are very often useful as a philosophical substitute for reality, but they are never actually perfectly representative of reality itself. Never. Not even in the case of the most "perfect" physical "laws" (although in some cases they are remarkably accurate and useful).

With financial markets, the weather, climate and many other phenomena, mathematical models are for the most part useless. Prove me wrong...

Alright after browsing FB marketplace, I think I can safely say we're seeing a mass divestment of traditional boomer bait for some pretty good deals (things like fully restored Mustangs and Camaros and the like). Also starting to see some of the newer toys going for really good deals from small business owners that ran businesses that shouldn't really exist (unnecessary middlemen that create no value, car wrapping businesses that excessively overcharge, etc)

the idiot wrote:

Ghost of Igloi wrote:... this Bear Market rally is impressive and historic. No market has ever been so divorced from fundamentals as today.

Igy, I think you're confused about the definition of a bear market? You can't wish it or imagine it to be so, it actually has to occur, with index values 20% below recent highs. At yesterday's close, SP500 is just a hair over 10% off all time highs. Maybe your perspective is divorced from reality?

You are wrong. It is still a Bear Market by definition.

There is a serious disconnect in the fact that you're too far out of your league here and you lack the vocabulary and prerequisite knowledge to really understand what I'm arguing.

You do not understand the problem, let alone the process. As I have told you multiple times now, it is highly stochastic non-trivial. This is not my toy hypothesis, it is accepted as mainstream by the general mathematics community. Go look up the accepted models for doing this kind of thing and then get back to me.

I mean this is just embarrassingly false. A time series model is going to be more accurate than a coin flip. Both are predictive models, one is better than the other.

This just seems like a non-sequitur to be honest

I feel like you should probably at least read a cursory introduction to dynamic systems and mathematical chaos theory before you go any further because this is starting to get cringe-worthy.

Ghost of Igloi wrote:You are wrong. It is still a Bear Market by definition.

OK, I suppose. I note that the definition of a bear market is a little fuzzy (not so far as I know a precise definition that's universally accepted), but since you work in this industry and I do not... maybe you are not divorced from reality... :-)

Racket wrote:I feel like you should probably at least read a cursory introduction to dynamic systems and mathematical chaos theory before you go any further ...

Racket, you are acting the petulant child. You really must shut up or put up. A better "prediction," or it didn't (can't) happen...

the idiot wrote:

Racket wrote:I feel like you should probably at least read a cursory introduction to dynamic systems and mathematical chaos theory before you go any further ...

Racket, you are acting the petulant child. You really must shut up or put up. A better "prediction," or it didn't (can't) happen...

You are almost literally putting your fingers in your ears and saying "LA LA LA LA LA I CAN'T HEAR YOU."

You don't understand basic mathematical modeling. Nothing wrong there. I have a PhD and there's tons of math things just in my little specialty area that I have no idea how to even approach. I admit it, I don't pretend like I'm some pseudo-intellectual bachelor's degree.

Anyways, I've moved on to a new fascination with the Facebook marketplace thing. You would not believe the 2-3 year old jet-skis and boats I'm seeing go for like half the price. What were people thinking when they bought this stuff lol

Cars seem to be hit or miss. Boats and jet-skis are definitely priced to sell though. I guess those are the things you sell first during hard times. If it gets worse, that's when you sell the cars.

idiot, how's this for a predictive model : economical health is directly inversely proportional to the number of restored 1970s muscle cars selling below market value on FB marketplace

Racket wrote:I have a PhD ...

Well there you go... (you haven't asked my education or experience, and I won't offer).

You can sidestep all you like, but the simple truth is that it is not possible for you to produce a demonstrably better estimate of what the market will do today, and you know that as well as I do. Or you should, if the PhD stuck.