Index Complexity – Science Confirms Intuition

Which of these US market indices is the most complex: DJI, NASDAQ or the S&P? Surely, it is the NASDAQ because it is full of tech stocks. The DJI, being based on what we would call the real economy, is quite the opposite, more suited for investors who are less risk-hungry. The S&P clearly lies somewhere in the…

Rating the Resilience of Major Markets, 31-st December, 2015

Resilience Ratings of major markets are reported in the table below. Analysis performed on 31/12/2015. The results are presented without comments.     Resilience is the capacity to absorb shocks or destabilizing events, such as financial contagion, stock market collapses, market bubbles, natural disasters or geopolitical events. Opposite of fragility, resilience provides an indication of…

Greece. Brutum Fulmen?

The GDP of Greece accounts for a very small percentage of that of the Eurozone. And yet, the magnitude of the reaction that the Greek crisis is inducing in the markets and in the media is certainly out of proportion. The amount of market capitalization that has been lost in the past few days exceeds…

Major Stock Markets: Is A Crash Imminent?

Over the past few months stock markets have been registering very positive performance. Some analysts claim the markets are in a bubble condition. Bubbles can emerge from cognitive biases, herd behaviour and involve positive feedback loops which accelerate bubble growth. The S&P, for example, has tripled since its low in 2009. Since the 1990s, the…

Is a Huge Stock Market Crash Imminent?

Blog written on January 12-th, 2015. In a recent article “Why The Next Stock Market Crash Will Happen Any Day Now”  it is claimed that a massive stock market crash (down by 50%) will happen any day now. Based on past crash patterns it is said that we are on the verge of another huge…

Are We Facing a New Collapse?

A quick look at the resilience of the major indices on December 19-th, 2014. The analysis is performed on a daily basis, we report the situation we have registered after the markets closed yesterday. EU: FTSE.MIB – 63.7% SSMI – 81.5% FTSE – 64.5% CAC40 – 44.6% DAX30 – 76.3%   Asia: HSI – 68.9%…