Seeking Alpha

JG Savoldi's  Instablog

JG Savoldi
Send Message
J.G. Savoldi is a graduate of Auburn University in Alabama where he majored in Criminal Justice Law. After graduation, Savoldi studied stock market history, Elliott Wave Theory, and everything he could absorb from conversations with market veterans--like fellow Alabama native Jimmy Rogers--and... More
My company:
The BAM Report and BAM Investor.com
My blog:
BAM BLOG
  • The Death of Efficient Market Hypothesis and Random Walk Hypothesis 0 comments
    Sep 26, 2009 2:11 PM | about stocks: SPY

    The 2008-2009 trading markets provided multiple examples of just how wrong-headed the advocates of EMH and RWH really are.

    After all, these efficient market guys built some of the quant models that blew up the world and saddled taxpayers with debt after we bailed them out.

    Please don't take this wrong--I'm not trying to come across as arrogant--but the idea that markets are random is absurd. A three year old child is capable of drawing a trendline and those trendlines existed long before graphs were available to the public and long before computer trading came into being.

    How is it possible that random price movement would create a trend channel and how could it create those trend channel on each and every fractal timeframe?

    The BAM Model was created by detailed study of price movement related to human emotion (behavioral analysis) and it required me twenty years to to develop this model.

    When markets are volatile and emotion is running high, as measured by the $VIX index, the BAM intra-day SPX model has at times predicted every move that the market would make during the trading session. For example we'll email clients with this:

    -strength into 9:15
    -weakness into 10:45
    -strength into 11:30
    -weakness into the close.

    If markets are random, how would that be possible?

    We're so confident in our model that we've committed to a Twitter "Full Access Campaign" where we're allowing the entire world to follow the predictions we send to our large hedge fund clients each day and we're going to do that each day until October 11th.

    Let's see how it goes and, if after watching our real-time messages, the doubters still believe in this EMH, RWH nonsense, I'll be shocked.

    I'll even tell them how I developed the model because I think they're so stuck in their views that they'll never take the time to figure this stuff out--

    100 years of monthly bar data would be considered by some as a decent data set to study but since each month equals one bar of data, 100 years equals only 1200 bars of data. If, on the other hand, you move down the fractal ladder and study just
    20 hours of 1 minute bar data that would also equal 1200 bars.

    Using this method of studying fractal movement--in essence an unlimited number of miniature bull and bear markets--it was possible for me to determine unequivocally, that what I thought I had discovered in the longer time frame studies of monthly, weekly, and daily charts was indeed showing up in each and every fractal level I studied.

    Very similar to fractals in Elliott Wave Theory but i built this from the ground up.

    I welcome you all to follow us free on Twitter until October 11th. bit.ly/AtFHY

    Our model is unequivocal in its message here. The stock markets of the world are about to crash and our model has identified both price targets and calendar dates for the events.

    By the way. When crude oil was trading at 147, we told our clients that the BAM model was predicting a crash in crude oil over the next 12-18 months taking the price down to 36 dollars per barrel. It only took 8 months to reach our target and, once again, these RWH guys said it was "totally unpredictable." What are the odds of that?

    Here are a few articles that came out after out September 21 call for a "50% stock market crash."  We have a target of $SPX 529 over the next 2-5 months.

    bit.ly/NPrXX
    bit.ly/MBYXD
    bit.ly/5pUXz

Back To JG Savoldi's Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.

Comments (1)
Track new comments
Full index of posts »
Latest Followers

StockTalks

  • We sold short GMCR yesterday at 74 in our real-time Twitter Full Access Campaign (twitter.com/baminvestor) target is 14.78 (BAM magnet)
    Oct 1, 2009
  • Probably our most controversial call right now is our downside crash target for $JPM. 17.70 is the target based on our BAM magnets
    Sep 27, 2009
  • We're long $FXP $FAZ $SRS $DUG because we're expecting a stock market crash
    Sep 26, 2009
More »
Posts by Themes
Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.