Stock Forecast Methods

Stock Market Trading and Investing

S&P-500 Forecast for the First Two Weeks of August on the Basis of Technical Indicators Signals

There are many technical indicators. And there are many interpretations of each indicator’s signal. Some stock investors and traders use particular favorite indicators and insist on own interpretation. Who is right? What if to allow a computer program to decide using back-testing which indicator should be trusted more and another less for particular market conditions and a specific stock?

One of computer programs that enables to compose the forecast with weights accordingly to predictive ability of each technical indicator is Investment Analyzer InvAn-4. It performs a short-term (10 trading days) forecast using Neural Network. The chart below shows an example of such forecast. It is S&P-500 forecast for the first two weeks of August, 2010.

S&P-500 Forecast for the First Two Weeks of August on the Basis of Technical Indicators Signals

Nothing in this piece or blog should be construed as investment advice in any way. Always do our own research or/and consult a qualified investment advisor. It is wise to analyze data from multiple sources and draw your own conclusions based on the soundest principles. Be aware of the risks involved in stock investments

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August 3, 2010 Posted by | Stock Market Forecast, Stock Market Software | , , , , , , , , , , , , | Leave a comment

Using Logarithmic Price Scale for Stock Performance

It is nice to see a simple linear chart with dollar numbers that is easy to calculate. However, linear price scale may not be good for significant changes in stock prices if we calculate money in terms of return on investment (ROI). For example, the change $10 of SP-500 gives around 10% market performance in 1970 but the same $10 change is equivalent only 1% of SP-500 performance in 2010.

Using Logarithmic Price Scale for Stock Performance

So that be aware that big changes on linear graph can be misleading since they may not represent big ROI. That is why logarithmic (log) price scales are used by many investors and technical traders. Log scale graphs correctly show in the percentage the rate of return-on-investment for both, small and big changes in prices. Log graphs show percentage changes accurately, since the same interval anywhere on the price scale represents the same percentage change.

Such software tool, as Stock Market Analyzer-Predictor SMAP-2/3, works with multi-year periods. That is why it uses a logarithmic re-normalization.

© Alex Shmatov. Published with permission of the copyright owner. Further reproduction strictly prohibited without permission.

March 5, 2010 Posted by | Stock Market Forecast, Stock Market Software | , , , , , , , | 2 Comments

Information Age: Stock Prediction Became More Complicated

These days, the stock market investors make many mistakes trying to predict the next move of a stock. What happened to some classical ideas of investing in the stock market and why old-time approaches do not work? Is stock market the same or it changed? How the age of worldwide economical integration, new technologies, and global problems affect the stock market investing? No doubt, in the last decade stock investing changed. Among the major changes are: (1) Globalization (strong economical dependencies, accessible global stock exchanges). (2) Technologies (instant delivering news, fast-triggered automatic trading systems). (3) Investors’ psychology (high sensitivity to news, more irrational behavior)… read more
© Alex Shmatov. Published with permission of the copyright owner. Further reproduction strictly prohibited without permission.

February 17, 2010 Posted by | Stock Market Forecast | , , , , , | Leave a comment

Knowledge Is Power

Knowledge is power; and unlike other resources, it does not diminish when it is shared but multiplies. Expected performance of a stock depends on quality of the company, market evaluation of its stock, and macroeconomic environment. Also general market conditions and news are significant contributing factors in stocks performance. That is why, a good investing decision should be based on a multi-dimensional consideration of many criteria. Consequently, one of the optimal solutions is to use fundamental, technical, and timing analyses together …read article "How to Become a Successful Investor"

February 4, 2010 Posted by | Stock Market Forecast, Stock Market Software | , , , , , , | Leave a comment