Log Periodic Power Law

[Mike]

In mid May I posted analysis based on Didier Sornette's observation that markets undergoing super exponential growth cannot continue for long and that an approximate time to a regime change can be estimated in advance. That analysis predicted May 22 for a change. The market began a correction on that date. Didier suggests that the prediction date can be estimated months in advance within a couple of weeks. May 22 began a short pull back but none the less the super exponential growth was stopped for a while. Today it appears that the market has doubled down on more obvious super exponential growth. On a log-price-scale chart a straight upward sloping line indicates exponential growth. Super-exponential growth will show upward curvature. Here is the NASDAQ on a log-scale weekly chart:

It appears to my eye that there is indeed an upward reaching curvature.
The next chart shows a fitted Log-Periodic Power Law equation to the NASDAQ daily close values.



The date that comes from the fitting is 2.3 trading days away. I note that Pascal has suggested caution based on his observations, I guess this analysis suggesting the same thing. If you Google Didier Sornette's name you can read more about his methods.