originally posted at:
http://trend-traders.com/2009/10/dow-jones-industrial-average-stock-index-forecast/
Dow Jones Industrial Average Stock Index Forecast
Index Values, Close of Month.
Month
Date
Forecast
Value
50%
Correct +/-
80%
Correct +/-
0
Sep 2009
9,712.3
0
0
1
Oct 2009
9,890
760
1,702
2
Nov 2009
9,990
936
2,096
3
Dec 2009
10,150
1,057
2,367
4
Jan 2010
10,170
1,152
2,580
5
Feb 2010
9,960
1,232
2,759
6
Mar 2010
9,720
1,301
2,914
7
Apr 2010
9,540
1,363
3,052
8
May 2010
9,310
1,418
3,177
Updated Saturday, October 10, 2009
All forecasts are provided AS IS, and FFC disclaims any and all
warranties, whether express or implied, including (without limitation)
any implied warranties of merchantability or fitness for a particular
purpose.
Dow Jones Industrial Average Stock Index
Past Trend Present Value & Future Projection
Noted:
Percent Correct
At the 50% Correct value, there is a 50/50 chance the forecast value will be
within this margin of error.
At the 80% Correct value, there is a 80% chance the forecast value will be
within this margin of error.
The potential range of a forecast’s value is found by taking the
published forecast value and both adding and subtracting the % Correct
Values.
The % Correct (or error) values published are based on prior forecast
performance.
For Example:
Forecast Value = 100
50% Correct Value = 10
80% Correct Value = 15
There is a 50% Chance the actual value will be between 110 and 90.
There is a 80% Chance the actual value will be between 115 and 85.
Technical Note: The
Financial Forecast Center has moved away from publishing standard
deviations of the forecast’s performance in recognition that the
distribution of value movements in the financial markets follow Levy or
Cauchy distributions, not Gaussian or normal distributions. Likewise,
the forecast model’s errors follow similar distributions.
A Gaussian distribution significantly underestimates the probability
of a large price or rate movement. A Gaussian distribution may
underestimate the probabilty of a 3 sigma price movement by a factor of
10. In other words, the chance of a 3 sigma movement is potentially 10
times greater than that predicted by a Gaussian probability curve.
The above change in error reporting enables a more accurate depiction of a
forecast model’s potential performance.
source : Financial Forecast Center
Kind Regards,
Aditya
www.trend-traders.com
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