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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: James F. Hopkins who wrote (19099)	7/1/1999 7:02:00 PM
From: steve susko	Read Replies (1) \| Respond to of 99985

thanks James. That's an interesting statistics. My guss is if the numbers are favorable tomorrow, it will rally and then decline. Otherwise it will just sell off allday ahead of the 3 day holidays.

To: James F. Hopkins who wrote (19099)	7/1/1999 7:07:00 PM
From: Timothy Liu	Read Replies (2) \| Respond to of 99985

What you put down is the same probability of throwing coins and get a series of heads in a row. The problem is, even if you get 6-7 heads in a row, the probability that the next one is head is still 50/50. Tim

To: James F. Hopkins who wrote (19099)	7/1/1999 10:31:00 PM
From: Berney	Read Replies (1) \| Respond to of 99985

Jim, That is really neat; what Index does it relate to? :o)

To: James F. Hopkins who wrote (19099)	7/1/1999 10:47:00 PM
From: Tai Jin	Read Replies (2) \| Respond to of 99985

That is not the right way to compute the probability. The probability of a trend extending an extra day is the ratio of higher to lower closes following the given trend. When computed properly, these are the probabilities for the DOW extending an up trend: 1->2 ..... 0.53 2->3 ..... 0.57 3->4 ..... 0.49 4->5 ..... 0.49 5->6 ..... 0.55 6->7 ..... 0.44 7->8 ..... 0.45 8->9 ..... 0.40 So we are more likely to have a lower close tomorrow. The probabilities for extending a down trend are: 1->2 ..... 0.47 2->3 ..... 0.49 3->4 ..... 0.50 4->5 ..... 0.26 5->6 ..... 0.28 6->7 ..... 0.00 Note that down trends have a much higher probability of ending after 4 days. At least from May 1990 (the start of my data) there has not been any down trend exceeding 6 days. ...tai