Abe Mishima

Modeling Select S&P 500 Share Prices

Ivan, it appears you are using cumulative CPI difference, which is a hard concept to follow. Have you tried doing year over year modeling, with a smoother that adjusts the two degrees of freedom in your fit? There is also a data gap in your first figure, during the years when the slope reversed. Yet, the data is available, as shown here (yoy, for example):

www.comerica.com/Comer...

It looks like t (transportation price inflation) is the best predictor for the '08 - '09 crash. Also, there are probably periods where the derivative of an index or index difference would have been the best input to the curve fits. Lastly, don't ever use the words "trial and error" in any presentation. The operative word is "optimization". LOL.