But in specific, recurring situations, reversion to the mean is the key to identifying market behavior.
The problem was that they would not adapt to changes in market behavior or volatility.
With this heightened volatility, we were observant that this market behavior was eerily similar to market conditions in 2007.
However, evidence from simple tests suggest the forecast is a mildly (not materially) contrarian indicator of future U.S. stock market behavior.
Its Growth Potential (up-market behavior) is only market, but its Risk Exposure (down-market behavior) is only two-thirds that of the market.
Even the most sophisticated calculations often fail to reflect future market behavior during a crisis, when historical relationships frequently break down.
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The current market behavior confirms that there is a lack of liquidity and that the markets are not trading on real fundamentals.
And we as traders only care about one thing: short-term market behavior.
Neo-Malthusians argue that key economic resources remain limited and that market behavior continues to be oriented around maximizing profits by managing scarcity.
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That is a reversal of market behavior over recent months, where Japanese stocks frequently reacted to currency moves, not the other way around.
However, as market behavior in recent months has shown, sentiment has a habit of switching and sending prices plummeting as fast as any rally.
The updated, second edition of How Markets Really Work: A Quantitative Guide to Stock Market Behavior by Larry Connors and Cesar Alvarez is now available.
Coming Spring 2012: the second edition of How Markets Really Work: A Quantitative Guide to Stock Market Behavior by Larry Connors and Cesar Alvarez.
But there is a difference between individual behavior and market behavior.
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Indeed, market behavior has been like a flight to quality.
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Price rationing and a functioning price system are the clear-cut winners for maximizing benefits between producers and consumers when these two sides freely and willingly engage in market behavior.
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The legacy carriers could identify a few local areas in which to test transition to an all IP network free of outmoded regulations and see if doing so inadvertently interferes with normal market behavior.
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This is typical of bear market recovery behavior, says David Katz, chief investment officer at Matrix Asset Advisors.
When positions and exposures cannot be determined rapidly--as was the case, for example, when program trades overwhelmed the system during the 1987 stock market crash--potential outcomes include highly risk-averse behavior by market participants, sharp declines in market liquidity, and high volatility in asset prices.
It also requires shaping strategy by providing the unique perspective available via the lens of someone who has knowledge of the talent market and human behavior.
This is a classic example of traders adjusting to market inefficiencies and an example of their behavior having a direct influence on market inefficiencies.
It is hard to imagine the hypothesis test that frames the mob behavior of the market.
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This, inevitably, leads to ugly results, because such behavior ignores the market shift.
Thus, says Minsky, the longer the period of stability, the higher the potential risk for even greater instability when market participants must change their behavior.
This is one of several dubious indicators that, while it may appear to be accurate, teaches us more about the fallibility of statistics than the behavior of the market.
These consumer loyalty ratings correspond very highly with behavior and sales and market share.
Today, we know the biggest cause of that crisis was reckless behavior in the housing market.
Six years later, the FTC extracted meaningful but modest concessions from Intel relating to its behavior in the chip market, which Intel dominates.
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