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Show HN: Is the stock market going to crash?

isthestockmarketgoingtocrash.com

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Re: Show HN: Is the stock market going to crash?

#261

Post by yrral »

babaganoosh89 wrote: post #232
PDoyle wrote: post #119

Earlier quoted context omitted.

Wow, really interesting read. Thanks for the link. Only trouble is that once people find patterns like this, they have a habit of disappearing. Hopefully this one is based on solid enough fundamental market forces that it persists after its publication. It was published in 2013 so we won't know for sure until after 2023.

I actually made an automatically updating chart for this using FRED data: http://financial-charts.effingapp.com TLDR: The correlation did go down a bit since publishing but still seems alright.

This is awesome. Would it be possible for you to extend the spx 10 year return line with a greyed out or dotted line from 2007 onwards that shows the running annualized return so far? So for example for 2012 it would show the spx annualized return from 2012 to 2017.

Re: Show HN: Is the stock market going to crash?

#262

Post by module0000 »

jliptzin wrote: post #260
module0000 wrote: post #242

Earlier quoted context omitted.

The best resource I know is John Grady's "No BS Day Trading" book. It's part of his basic course at http://www.nobsdaytrading.com/courses/basic-course/ Reading that and applying it was a huge turning point for me in my trading.

Couldn't this strategy be easily automated, and therefore, probably has been competed away by now?

The more this strategy is automated, the more effective it becomes. This is a simple explanation for "trends", as people see liquidity consumption and enter on the side to further consume it - more people repeat the pattern. The net result is a "trend", which is a blunt way of saying "demand exceeded supply in direction".

There is no sane way to automate this, since everyone's description of "enough" volume delta is different. Perhaps I open positions at a CD imbalance of 15%, bank of america waits on 19%, and chase at 25%. My actions at 15% further the delta, causing bank of america's 19% threshold to fire, which in turn increases the delta to 25% causing chase's threshold to fire. Until every day trader "gets on the same page" so to speak, this will not be automated. And...if they ever do get on the same page, then it only takes 1 person with decent equity to take the other automated strategies to the cleaners.

tldr; This will be automated away when greed no longer exists, i.e. never.

Re: Show HN: Is the stock market going to crash?

#265

Post by babaganoosh89 »

cloudkj wrote: post #259
babaganoosh89 wrote: post #232

Earlier quoted context omitted.

I actually made an automatically updating chart for this using FRED data: http://financial-charts.effingapp.com TLDR: The correlation did go down a bit since publishing but still seems alright.

Thanks for this. Can you also add a way to change the window for S&P returns from 10 years to other time windows? It'd be interesting to see how the plot changes with adjustments to the window.

I remember looking at other time windows, anything 5 years or below wasn't great.

Re: Show HN: Is the stock market going to crash?

#266

Post by randyrand »

pdog wrote: post #69

If you're looking for The Single Greatest Predictor of Future Stock Market Returns[1], here it is: http://www.philosophicaleconomics.com/2013/12/the-single-gre... This is a long read, but it's worth it. The metric can be calculated in FRED[2], and as a predictor of future returns, it outperforms all of the most common stock market valuation metrics, including cyclically-adjusted price-earnings (CAPE) ratio[3]. (Basic…

I personally don't think the past 100 years are going to look anything like the next 100 as far as the stock market is concerned. But we will see.

Re: Show HN: Is the stock market going to crash?

#267

Post by mzh0 »

babaganoosh89 wrote: post #232
PDoyle wrote: post #119

Earlier quoted context omitted.

Wow, really interesting read. Thanks for the link. Only trouble is that once people find patterns like this, they have a habit of disappearing. Hopefully this one is based on solid enough fundamental market forces that it persists after its publication. It was published in 2013 so we won't know for sure until after 2023.

I actually made an automatically updating chart for this using FRED data: http://financial-charts.effingapp.com TLDR: The correlation did go down a bit since publishing but still seems alright.

I saw lot's of suggestions above, how about making it on github so anyone can hack it?

Re: Show HN: Is the stock market going to crash?

#268

Post by amelius »

module0000 wrote: post #230
matthewbauer wrote: post #214

Earlier quoted context omitted.

Not nearly as bad as some of the "Technical Analysis" I've seen. From what I gather, "Technical Analysis" just amounts to this is what the stock has done in the past, maybe it will do that in the future?

Yes and no. It depends what type of technical analysis you are doing... If your technical analysis has no other inputs except the price(over any period(s) of time), then you may as well go buy a lottery ticket. If you are wondering which category you are in, if at any point during your "analysis" you find yourself looking for things with names like "evening star", "bullish engulfing", "head and shoulders", etc.... sa…

Can anybody explain the fundamental reason behind "resistance/support lines" in technical analysis?

I'm guessing it is a self-fulfilling prophecy (everybody believes in it, so it becomes true), but perhaps there is a logical explanation that I'm totally missing.

Re: Show HN: Is the stock market going to crash?

#269

Post by int_19h »

JumpCrisscross wrote: post #169
hervature wrote: post #165

Earlier quoted context omitted.

Gold having intrinsic value is a straw man argument for it being different than Fiat currencies. Consider this thought experiment. You are going to live by yourself in the forest for a month. Would you rather have A) a weeks worth of food or B) 1 oz of gold. I think this highlights there is no intrinsic value or at least much lower than what people claim. Obviously, there is place for gold in electronics and circuitr…

Gold's price is not supported by its instrinsic value, I'll give you that. But the "forest" test is absurd. By that definition computers, chemotherapy and candy have no instrinsic value. Gold's value comes from its (a) millennia-long history of stably holding value across cultures and technological domains and (b) its tangibility and physically-enforced scarcity. Its intrinsic value is a fraction of its market value,…

> Gold's value comes from its (a) millennia-long history of stably holding value across cultures and technological domains

That's recursive - you're basically saying that gold has value because it has historically being valuable. Which begs the question of why it has been valuable.

I'm not saying that this doesn't add some (most, in fact) value to gold. I'm just saying that this isn't a property that is enabled by anything specific to gold.

Re: Show HN: Is the stock market going to crash?

#270

Post by empath75 »

SmellTheGlove wrote: post #256
empath75 wrote: post #126

Earlier quoted context omitted.

I think that there has to be some responsibility pushed back onto the universities and banks that are selling these loans for defaults. I think it's obscene that colleges are selling near-useless degrees to 18 year olds for $50k+. There has to be some incentive for either colleges to charge less for certain degrees or push people into degrees that will lead to higher paying jobs, or simply get pickier about who they…

But there isn't any risk to the school or the lender. Anyone can get student loans up to the federal cap, and they're practically not dischargeable, either. The incentive has to come from somewhere else, but most solutions involve making it a lot harder for poor people to go to college. It's a tough problem.

Make the schools have to refund some of the money if their students default.
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