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Stock market crash: predictive power of slope variance

Major crashes seem to start with a few very steep drops in stock price, followed by moderate, slower decreases. Until the slow declines appear (with modest negative slopes), any recovery is temporary.

click here to see a chart comparing today (red) with the great depression (black). It seems that in March-09, the slope was not as steep as before (December-08), pointing to the fact that a full recovery might come within the next 2 years.

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Permalink Reply by Arun on May 15, 2009 at 8:38pm: The resemblance between the two are very striking. Yet, I see that the fall is not that steep as the Great Depression was. You are right when you say that the slope has already started to behave better than what it was, but I'd like to wait for it to pass the test of time. I'd just like to see how it passes through this period, and contrast to the GD period.

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Permalink Reply by timothy vogel on July 24, 2009 at 5:26am: Ever heard of Ralph Nelson Elliot?

http://www.elliottwave.com/info/

The slope you described is embedded within a pattern of rising and falling waves. Noticing one slope contrast between two time-series across one measured time slice is a mere shadow of the complexity of patterns identified and tracked by those who seek to emulate "the Father of technical analysis"

TV; ▶ Reply to This