My prediction

I have a prediction. This will be down week. Too overbought.

In the gambler’s fallacy, people predict the opposite outcome of the previous event - negative recency - believing that since the roulette wheel has landed on black on the previous six occasions, it is due to land on red the next.

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In the gambler’s fallacy…

You said this better than I would have, which is that I believe the OP’s prediction has at least a 50% chance of coming to pass.

Pete

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In the gambler’s fallacy, people predict the opposite outcome of the previous event - negative recency -
believing that since the roulette wheel has landed on black on the previous six occasions, it is due to land on red the next.

The gambler’s fallacy really only applies to things which are not serially autocorrelated.
Market returns are not independent–random–from period to period.
The non-randomness is quite strong near extremes, depending on the time interval you consider.

Sure, the autocorrelation is generally low, but it would not be fair to dismiss the prediction based on reasoning that simply assumes it’s a random walk.

Jim

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Here is a nice little post on someone who wanted to test the Gambler’s Fallacy using 20 years of stock market data.
https://sixfigureinvesting.com/2013/11/market-with-consecuti…
the data suggests that any sort of directional analysis based on market history is just another example of the Gambler’s Fallacy.

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I based my idea on technicals, not the reverse gamblers fallacy.

I looked at the bollinger bands, the size of the candles, the RSI, the stochastics, A few EMA’s, the hull moving average, and the macd. Not all the signals showed overbought, but enough did for me to make my prediction.

I don’t see what I did being any different than using the no new 99 day new highs.

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