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The pages linked below show
graphics where, in red, are plotted the daily
closes of the index, in black, the forecasts. The
thicker black line is the prediction for 20
trading days into the future and the pink shadow shows
how far extends the uncertainty zone. Of that
uncertainty zone, the black line is the most
probable future behavior of the market. The wider
the shadowed zone, the lesser the stability of
the forecast. The purpose sought by this
predictions is forecasting the trends of the
market, showing as precise as possible the
position of the turning points. The predictor is
built to just try to find the position of local
maxima and minima and not the exact value of the
index.
Thus actual
local maxima and minima should be found around
the day predicted (may be one or two days before
or after). Also, you have to be warned that
economic scenarios may change suddenly rendering
the prediction useless. The predictor has good
performance in "quiet times", but when
the market exaggerates a trend, as in a crash,
the mechanims at work change and the predictor
fails to predict. This facts can be observed in
the historical forecasts below.
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