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Technology Stocks : DELL Bear Thread -- Ignore unavailable to you. Want to Upgrade?

To: Chuzzlewit who wrote (1694)	8/27/1998 9:32:00 AM
From: Moominoid	Read Replies (3) \| Respond to of 2578

That doesn't mean there isn't a stochastic trend. That sounds like an oxymoron to me. I use the word 'stochastic' to mean random. This is a pretty standard concept in time series econometrics. A random walk with a constant drift is a stochastic trend. Perhaps more realistic (in my opinion) are I(2) processes which are random walks with drift terms that are themselves random walks. These trends are smoother than the standard random walk. The slope of the trend while "locally linear" is constantly changing. A possibly useful model is a stochastic trend of this type + a noise process. This "structural time series" model allows the decomposition of what superficially looks like a random walk into more useful components. I could go on and on but this might give a slight flavor of where I'm coming from. What I'm interested in getting at is the points where the trend is likely to change direction. This might bot be apparent by just looking at the series. News or real world events (depending on the model context) continually enter the model equation. The process progresses period to period according to this information. The effect they have on the process may well depend on is past history. Standard TA seems a lot more deterministic than what I have in mind. Some of the time Bollinger Bands seem to give similar predictions than a simple statistical model I have developed. I don't know why. It doesn't work all the time as well. However, this is a way to communicate my thinking to other people without them having to understand my actual approach. Hope this helps!