10-19-2013 Comments

[Chern]

Mike thank you for your comments. I am still somewhat confused. I thought Sornettes work was designed to detect a "crash", hence my question, why not short the index here with fairly tight stop, take a small risk on the market going higher(granted likely with this FED liquidity) but actually bet on the crash which would be huge though low probability upside given how the curve looks. Thank you again for sharing your work.

[Mike]

Mike thank you for your comments. I am still somewhat confused. I thought Sornettes work was designed to detect a "crash", hence my question, why not short the index here with fairly tight stop, take a small risk on the market going higher(granted likely with this FED liquidity) but actually bet on the crash which would be huge though low probability upside given how the curve looks. Thank you again for sharing your work.

Sornette originally used the word crash but has since moved onto another description of a regime change. The two past times I detected super exponential growth led to short pull backs. Perhaps that is just the nature of what is going on with the FED buying programs. I noticed that quite a few stocks made new highs today, not much of a regime change so far. TSLA however is below its ten-week moving average. Sornette did indeed short an index on the 1987 crash when he predicted it. I am just more of a stock picker and QE is still here. RAX is more of the kind of set up for a short that I prefer.