motivated by ... curiosity
Comparing Historical Prices
Over the past month (ending Jan 16, 2008) the markets have been dropping dramatically:
the TSE and the DOW each down about a thousand points.
I was beginning to wonder when these indices would reach bottom, so I thought I'd do the following:
Having adopted 1 and completed 2, 3 and 4 ... I identified the best-match historical month: Aug 6, 2001 to Sep 7, 2001
- Assume the future is a replica of the past.
- Look carefully at the TSE performance during the past month.
- Examine every 1-month period in the last eight years.
- Identify that month which matches the current month.
- Determine how long that historical month took to recover.
- Predict that the current market chaos will end as it did in the days succeeding the historical image.
Subsequent to Sep 7, 2001 the TSE reached a minimum on Sep 24, 2001.
That's a period of 17 days.
Conclusion? The TSE will reach its bottom in 17 days.
>And you REALLY believe that? Haven't you heard? The future is not a replica of ...
Yes, yes, I know ... but it's great fun!
Who knows, the spreadsheet may be of interest to others who'd like to compare historical months to the most recent month.
Click on the picture below to download ... and play:
- Type in the stock or index symbol (a la Yahoo: in the picture above, it's ^GSPTSE = the TSE / TSX)
- Click the Download Data button to get 8 years worth of daily prices.
- To change the historical month, move that slider back and forth
However, you can choose to define "Best Match" according to one of three criteria.
The historical month changes and you get a moving window, comparing the (moving) historical month to the current month.
(In the picture above, it's the red curve in the right chart: Sep 8, 2004 to Oct 12, 2004.)
... sorta like this
We're following a $1000 portfolio.
>So I keep playing with that slider until I get a good match?
In the picture it's
Then you click a button to have the spreadsheet search for the "Best Match", according to the criterion you selected.
>And you think that's useful?
Useful? Did I say it was useful? I thought I said it was fun!
for part 2