Current log-periodic view on future world market development

TL;DR

This paper evaluates the applicability of financial log-periodicity to predict world market trends, successfully forecasting key market movements from 2000 to 2010, including the 2008 correction signals and future market phases.

Contribution

It extends the log-periodic approach to recent market data, providing updated predictions and demonstrating its effectiveness in forecasting major market turning points.

Findings

Predicted the 2007 stock market increase.

Identified a market correction signal for March/April 2008.

Forecasted a long-term bullish phase ending around November 2009.

Abstract

Applicability of the concept of financial log-periodicity is discussed and encouragingly verified for various phases of the world stock markets development in the period 2000-2010. In particular, a speculative forecasting scenario designed in the end of 2004, that properly predicted the world stock market increases in 2007, is updated by setting some more precise constraints on the time of duration of the present long-term equity market bullish phase. A termination of this phase is evaluated to occur in around November 2009. In particular, on the way towards this dead-line, a Spring-Summer 2008 increase is expected. On the precious metals market a forthcoming critical time signal is detected at the turn of March/April 2008 which marks a tendency for at least a serious correction to begin. In the present extended version some predictions for the future oil price are incorporated. In particular a serious correction on this market is expected to start in the coming days.