Forecasting Financial Extremes: A Network Degree Measure of Super-Exponential Growth.

Forecasting Financial Extremes: A Network Degree Measure of Super-Exponential Growth.

Blog Article

Investors in stock market are usually greedy during bull markets and scared during bear markets.The greed or fear spreads across investors quickly.This is known as the herding effect, and often leads to a fast movement of stock prices.

During such market regimes, stock prices change at a super-exponential rate and are normally followed by a trend reversal that corrects the previous overreaction.In this paper, we construct an indicator ELICA HIDDEN IX/A/60 CAPPA ASPIRANTE 60 CM INOX COMANDI TOUCH CONTROL to measure the magnitude of the super-exponential growth of stock prices, by measuring the degree of the price network, generated from the price time series.Twelve major international stock indices have been investigated.

Error diagram tests show that this new indicator has strong predictive power for financial extremes, both peaks and troughs.By varying the parameters used to construct the error Baby Play Mat diagram, we show the predictive power is very robust.The new indicator has a better performance than the LPPL pattern recognition indicator.