Does anyone know where or how to get equations that model the stock market indexes over time?
I’ve been working to get a model equation that reflects expected index prices, so I can calculate deviation and predict major rises and falls. I’ve been working mainly with the Dow and S&P, but have yet to find an equation that has the degree of accuracy I’m looking for. I have attempted both compounding and logarithmic equations (and weighted for both), and though they are extremely indicative, they are based on many assumptions of where the indexes should have been starting and where they should be now. Attempts to use midpoint averages have not worked out as I’ve wished. Despite this, my models are accurate enough to prove its possibility, and show volatility very clearly and indicate crashes (in the past) very well. I’m trying to find an existing model that does what I am attempting, for ANY index, so I can apply it for the next few years (especially to indicate when it can rise again to set up long term stocks). This will save me many more hours of work! Thanks for your time
Comments
There are no equations – it’s a myth that the stock market moves in rational ways.
Time after time, the experts have failed to outperform random selection of stocks by darts or novices.
It comes down to "your guess is as good as the next guy’s"
If there were such an equation then the stock market would be entirely predictable and a mean regression method would be a license to print money. (Which it isn’t. People who try mean regression regularly make a small amount of money consistently until a large loss wipes them out.)
The market moves in anticipation of suspected future events. How can you predict that? What is the time span of your prediction? What you can do is recognize patterns and the near term probable outcome when a setup occurs. This is known as technical analysis. Check out yahoo group ComputerProgramPicks. Good luck on your endeavor. Having luck is executing with a prepared mind.
July 25th, 2010 at 7:54 pm
Equations and models are good only for describing past stock market performance. But there is no reason why the future has to be the same as the past. And quite often the future is different from the past. Which means that any equations or models based on past stock market performance are likely to lead you astray, when you use them to predict the future stock market performance.