Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Dell Technologies Inc. -- Ignore unavailable to you. Want to Upgrade?

To: Geoff Nunn who wrote (57582)	8/11/1998 1:18:00 PM
From: Chuzzlewit	Respond to of 176387

Geoff, you've expanded on exactly the point I was trying to make -- the illusion of momentum. Many people claim that momentum is responsible for prolonged stock price movement, when in fact it is the result of the stochastic nature of markets, much like a coin flip. As you are undoubtedly aware, one of the tests for randomness of data is "runs analysis", wherein the investigator checks the observed number of runs against the expected number of runs. Given a large enough data series, the frequency of runs is used as the basis for statistical testing. This anti-intuitive phenomenon of runs is observed in many situations, the most benign being sports. It is frequently seized upon by the paranoid among us as the basis for various conspiracies. Jim Leon and I had a similar, though more general discussion of this phenomenon about a year ago on the TLAB thread. As I recall, it was one of the bases we postulated that could be successfully used to practically refute TA. Of course, real statistical analysis has little sway over people who believe in TA. TTFN, CTC