The S&P has topped !!

I think we'll see 1300 in the next 5 months.

 

I want to point out that the odds that the S&P does NOT see 1300 in the first 6 months of 2006 are 40 to 1.

That's right, the odds are 40 to 1 that the S&P won't see 1300 during the first half of 2006. That's a 2.5% probability of me being right. For those of you that like texas hold 'em, the odds are greater of hitting the one card you need on the river (5% or 20 to 1) than me being right on the S&P.

So it's nice to see that 3 "elite-traders" are going with the 97.5% probability!! These people will be right 39 of 40 times.

 

Where did I read this?

 

How are you working out your probabilities? Using 20 day historic volatilty there is a 1 in 20 chance of it hitting 1300 by the 30 of January. Also a 1 in 20 chance of it hitting 1239 by the the 30th. Attached chart is the ODDS probability cone in metastock on the SP futures continuation, no back adjusting for gaps, set to two standard deviations 95.4%.

 

can I answer a question with a question?

1) what are the odds that the S&P trades between 1240-1300 for the entire first half of 2006?

2) what are the odds the S&P doesn't go below 1240 in the first half 2006?

the answer to the entire puzzle lies in the answer to these 2 questions.

 

I put it at 32% or 1 in 3.

 

you put what at 33%?

 

1 in 3 chance that it hits either 1300 or 1240 by the end of June

 

i'm gonna borrow a line from riskarb, and say, "go find your high school statistics teacher and beat the living hell out of him."

So it's only 1 in 3 chance that the S&P hits 1300 or 1240 by the end of June? I'll take that bet, up to $100,000, and we'll use Baron as an intermediary.

I say the S&P will hit either 1300 or 1240 by the end of June, and i'll bet you at even money, so that's better for you than the odds you gave of 1 to 3.

 

$100,000, i'll toss you for it!