2006, 2., 93-98, DOI: 10.1007/4-431-28915-1_16

Prediction oriented variant of financial log-periodicity and speculating about the stock market development until 2010

Stan Drożdż, Frank Grümmer, Franz Ruf and Josef Speth

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Abstract

A phenomenon of the financial log-periodicity is discussed and the characteristics that amplify its predictive potential are elaborated. The principal one is self-similarity that obeys across all the time scales. Furthermore the same preferred scaling factor appears to provide the most consistent description of the market dynamics on all these scales both in the bull as well as in the bear market phases and is common to all the major markets. These ingredients set very desirable and useful constraints for understanding the past market behavior as well as in designing forecasting scenarios. One novel speculative example of a more detailed S&P500 development until 2010 is presented.

Key words  Financial physics - critical phenomena - log-periodicity

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