Technical Analysis does not work, never did, never will

WeToddDid2 said:
Bold and underline mine below.

http://insight.kellogg.northwestern.edu/article/picking_up_pennies_for_profit

"New research by Robert Korajczyk (Professor of Finance at the Kellogg School of Management), Kellogg alumnus Ronnie Sadka (Professor of Finance at Boston College), and Steven L. Heston (Professor of Finance at the University of Maryland) reveals surprising patterns that can help predict daily peaks in stock price. This work was deemed so influential in the field of quantitative investment that it was awarded the 2009 Crowell Prize by PanAgora Asset Management."

"Each 9:30 AM to 4:00 PM trading day was broken into thirteen half-hour intervals. The researchers studied more than 16,000 such intervals in total, spanning from January 2001 through December 2005. For each of the roughly 1,700 stocks, the group measured the return across each interval. They then compared stocks’ returns at each interval to returns at previous intervals. A clear pattern emerged. Earlier returns preceding in multiples of exactly thirteen intervals (e.g., 13, 26, 39, 52, etc.) showed significant correlation to the return over the current interval.

In other words, knowledge that a stock’s return was high between 3:00 and 3:30 yesterday afternoon predicts that its return will be high between 3:00 and 3:30 today, tomorrow, the next day, etc. So buyers could realize a premium by buying that stock on the cheaper side before 3:00, and sellers could wait until the value topped out between 3:00 and 3:30 to execute sales. Moreover, though the strength of the prediction diminishes from one day to the next, this predictive pattern persists every day for up to forty trading days, spanning roughly two months."

Wow! Now that is interesting. So they studied past price behavior and found a repeating pattern. Yeah, that sounds nothing like TA. Then published a study regarding their results and won a quantitative award for it.

ADD: Furthermore, they found that past price behavior predicted future price behavior. Yeah, nothing like TA.

ADD: Do the results of this study in anyway put a dent in EMT? Perhaps someone should tell Tom Sosnoff about this study and the guys down the street at University of Chicago.
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I was gonna read your post but it's so damn long and just does not seem worth the effort. Can you do me a favor, and type it all over once more?
(buuuuuuuurp)
 
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learner2007 said:
I planted some flower seeds in a sandbox last December. The next day there were no flowers.
So that proves it. 'Gardening does not work, never did, never will'.

I should have listened to those guys on ELITEGARDENER. Especially that guy whose handle
is gardenpest.
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Thx for the heads up... Won't waste my time w/ the gardening then
 
NoVoodooHere said:
I was gonna read your post but it's so damn long and just does not seem worth the effort. Can you do me a favor, and type it all over once more?
(buuuuuuuurp)
More...
Just read the Bold and my comments below the quotes.

Here is the punchline.

"In other words, knowledge that a stock’s return was high between 3:00 and 3:30 yesterday afternoon predicts that its return will be high between 3:00 and 3:30 today, tomorrow, the next day, etc."

That is the study found that past price behavior predicted future price behavior and they won a quantitative award for it. That sounds nothing like TA.
 
WeToddDid2 said:
Just read the Bold and my comments below the quotes.

Here is the punchline.

"In other words, knowledge that a stock’s return was high between 3:00 and 3:30 yesterday afternoon predicts that its return will be high between 3:00 and 3:30 today, tomorrow, the next day, etc."

That is the study found that past price behavior predicted future price behavior and they won a quantitative award for it. That sounds nothing like TA.
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nah can't be bothered
 
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