
Fig. 5 extends figures 1 and 2 by performing a sensitivity analysis
on the log-periodic formula with a second log-periodic harmonic
(dashed lines in figures 1 and 2), in order to assess the reliability
and range of uncertainty of the prediction. Using the fit shown
in dashed solid lines in figure 2, we have generated 10 realizations
of an artificial S&P500 by adding the GARCH noise (described in
the previous caption of Fig. 4)) to the dashed solid line. We have
then fitted each of these 10 synthetic noisy clones of the S&P500
by our log-periodic formula. This yields the 10 curves shown here
in magenta. This test shows that the log-periodic formula with
a second log-periodic harmonic (dashed lines in figures 1 and 2)
is also providing stable scenarios: the precise timing of the highs
and lows remain robust with respect to the realization of the noise.
This conclusion is CORRECTING our previous incorrect conclusion
of last month, based on a bug that we have now corrected. Last
month, we were casting doubts on the robustness of the log-periodic
formula with a second log-periodic harmonic (see Fig. 4 of last
month which is INCORRECT DUE TO A BUG). This resulted from a bug
in our program. The corrected program now confirms a robustness
of the formula with respect to different noise realizations. The
real S&P500 price trajectory is shown as the red wiggly line.
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