Discussion in 'Trading' started by bgp, Oct 9, 2007.
has anyone done any correlations between now and 1973 ?
Both 2007 and 1973 have number "7"?
1+9 = 10, 7+3 = 10, 10+10 = 20 and 07 which is 2007. I am scared already...
I see ET turns newbie into wiseguy in no time.
here is the table of corr. percentage between this year and prev years, seems like we are trading the same old market all the time.
What??...The market is correlated with itself...:eek:
Wow, a whole -11% and 47%! That's a nice link. Goes to show how many years look alike to the aspiring pattern finder.
i have read some business magazines from 1973-74 and they talk about the same issues being raised now :food prices were going up, oil increases, except they did not have this huge consumer debt hanging over there head. guess what happened ? dec.1973 the dow started dropping it lost 50% of its value in less than 1-year. IS EVERYTHING REALLY WONDERFUL ?
Start playing with time and price scale transformations and you really start to see things. I personally fancy this one right now.
<a href="http://tinypic.com" target="_blank"><img src="http://i20.tinypic.com/5x91zb.jpg" border="0" alt="Image and video hosting by TinyPic"></a>
However, after you play with these comparisons long enough, you start to realize the fractal trickery inherent in them. The mind is very good at recognizing and filling in patterns. You can just about always find a way to see patterns in different time frames that resemble coherent or divergent outcomes to the present period; i.e. you can find a way to show an equal likelihood for any outcome you desire based on scale transformations and pattern comparisons.
They are useful in looking at potential
recurring patterns and possible outcomes (past history is certainly a useful guide), but have to be viewed cautiously and subjectively.
"Patterns are the fool's gold of financial markets... They are the inevitable consequence of the human need to find patterns in the patternless."
so correlations doesn't get you any closer to the grail.
The government debt then was also a pittance by comparison. That means a recession can't be allowed to occur, because if its does, all these debt bubbles will turn into bad debt bubbles, and lenders/banks will go under right and left. So better to print more money and hope things don't blow up. Just don't ask who is expected to keep buying all the bad debt.
Vietnam War and Now Iraq and war on terror..
both are sucking resources from the gov't treasury!
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