It seems market bottoms can be predicted

Discussion in 'Trading' started by a5519, Aug 28, 2006.

  1. billp


    #11     Aug 28, 2006
  2. I can post as many charts as you want with just about any indicator you want that will show every bottom and top almost perfectly.
    #12     Aug 28, 2006
  3. #13     Aug 28, 2006
  4. a5519


    #14     Aug 28, 2006

  5. Stock Market Safety Index
    We use the Stock Market Safety Index (MSI) as an indicator of the market's condition. Its main purpose is to tell us whether the market is overvalued or undervalued. We compute the MSI by taking the difference between an extrapolated SP500 earnings yield and the current 90-day TBILL discount interest rate. The extrapolation is 13 weeks and computed with a constrained quadratic least-squares fit of the preceding 52 weeks of earnings. A MSI value greater than zero means that the equities yield is higher than the TBILL yield and the market is undervalued. A MSI value less than zero implies that the equities yield is lower than the TBILL yield and the market is overvalued. In terms of return and risk, a large positive value would favor stocks as an investment. A large negative value would favor less risky investments, such as TBILLs. If you look at plot of the MSI over the past it is easy to pick out the 1987 crash, the 1990 mini-crash, and the 2001 decline

    #15     Aug 28, 2006
  6. Cheese


    Sure they can.:D
    Its called 'buying around the bottom of an upmove or selling around the top of a downmove'.
    #16     Aug 28, 2006
  7. S2007S


    Its always after the fact that people talk about bottoms, never during or before. Where is the market heading right now from the charts everyone is looking at. Is dow 12k next or 10k, is the s&p going to break out to new highs. Is the nasdaq headed back to 5000, hahah.
    #17     Aug 28, 2006
  8. S2007S


    Market bottoms cannot be predicted....again its after the fact that they can be predicted.
    #18     Aug 28, 2006
  9. lindq


    It's actually quite a bit easier. Just tune your TV to CNBC. When the screen has a quad split of four talking heads blathering on about why the market is going to hell and why you should "stand aside", it is time to buy.
    #19     Aug 28, 2006
  10. a5519


    It could have value as you descibe. But almost impossible to quantify.
    #20     Aug 28, 2006