Thanks for your detailed reply Arepo. I can see that this news debate is quite hot with others also!
i'm guessing you don't have much of a background in science...
let me first point out that correlation does not imply causation, that is, just because it happened "at the same time" does not mean that A caused B or vice versa. cum hoc ergo propter hoc is a logical fallacy.
secondly, even if you value this hypothesis, you need to be able to support it with some kind of evidence. i'm not saying that it is definitely not the case that the Overstock news prompted the "mini-rally", but you seem to be claiming that it definitely is the case, without any supporting evidence whatsoever. this is a problem. if you don't ever second guess your intuition, you'll never realize how often it is wrong...
some things to consider about the limits of our knowledge:
when?: do you think everyone learned about the Overstock news at exactly the same moment? probably not. if it had an effect on price, it was likely "priced-in" a lot more gradually than your claim assumes.
how?: are you sure that the Overstock news should have an immediate bullish influence on the price? perhaps in the long run, because of increased adoption, but in the short run, there are actually some bearish possibilities.
the answers to both of these questions of WHEN and HOW news events and other external forces affect price are mired in the complexities of the market, and are the farthest, farthest cry from "simple facts that everyone can see with their own eyes".
i hope you took a moment to reflect on these important limitations to the claims we can make about price behavior.
--arepo
'If it had an effect on price, it was likely "priced-in"'?? So you're saying the news could have had an effect then. I'm afraid that I won't be drawn into technicalities on the news issue or bother bringing up observational analysis such as Chinese news for evidence (because observations do count as empirical evidence of course). Although I must say that I wonder whether you would be as quick to dismiss your own model if your predicted upwards break had been disturbed by a negative news clip from China for example. Please be careful not to slip into sophistry.
it's funny that you claim to know for sure what caused the move up. i would take the scientific approach and say that the fractal model is sufficient to predict that the price would move up after such a large volume bounce off of the moving support, and so Occam's Razor encourages me to ignore any other data. it is because of this that i believe market forces win against news every time. in fact, i have empirical evidence to support this claim, while you merely assume that it was the news
--arepo
Two can play at that game! Ockham's Razor demands parsimony. I would take the common sense approach and say that "good news causes the price to jump; bad news causes the price to fall" is sufficient. The fact that this would be "priced in" to a more complicated model is not enough to spare this model from Ockham's Razor - it must be cut loose if the simple fact itself is sufficient. There's some sophistry for you!
As I said before I do respect the effort you put into explaining your work and your work itself, but please don't discount something you perceive as "unscientific" - especially if you claim that it may all be "priced in" already. Incidentally that is what lies at the root of your debate with me. I never criticized your prediction; I just said "whoops look how the news broke the fractal pattern". It was a simple point about news. You could have agreed and added that it was priced in to your model. Agreement across the boundary between science and common sense - nothing wrong with that!
PS. Congratulations on predicting this upwards breakout!
i'm guessing you don't have much of a background in science...
let me first point out that correlation does not imply causation, that is, just because it happened "at the same time" does not mean that A caused B or vice versa. cum hoc ergo propter hoc is a logical fallacy.
secondly, even if you value this hypothesis, you need to be able to support it with some kind of evidence. i'm not saying that it is definitely not the case that the Overstock news prompted the "mini-rally", but you seem to be claiming that it definitely is the case, without any supporting evidence whatsoever. this is a problem. if you don't ever second guess your intuition, you'll never realize how often it is wrong...
some things to consider about the limits of our knowledge:
when?: do you think everyone learned about the Overstock news at exactly the same moment? probably not. if it had an effect on price, it was likely "priced-in" a lot more gradually than your claim assumes.
how?: are you sure that the Overstock news should have an immediate bullish influence on the price? perhaps in the long run, because of increased adoption, but in the short run, there are actually some bearish possibilities.
the answers to both of these questions of WHEN and HOW news events and other external forces affect price are mired in the complexities of the market, and are the farthest, farthest cry from "simple facts that everyone can see with their own eyes".
i hope you took a moment to reflect on these important limitations to the claims we can make about price behavior.
--arepo
'If it had an effect on price, it was likely "priced-in"'?? So you're saying the news could have had an effect then. I'm afraid that I won't be drawn into technicalities on the news issue or bother bringing up observational analysis such as Chinese news for evidence (because observations do count as empirical evidence of course). Although I must say that I wonder whether you would be as quick to dismiss your own model if your predicted upwards break had been disturbed by a negative news clip from China for example. Please be careful not to slip into sophistry.
it's funny that you claim to know for sure what caused the move up. i would take the scientific approach and say that the fractal model is sufficient to predict that the price would move up after such a large volume bounce off of the moving support, and so Occam's Razor encourages me to ignore any other data. it is because of this that i believe market forces win against news every time. in fact, i have empirical evidence to support this claim, while you merely assume that it was the news
--arepo
Two can play at that game! Ockham's Razor demands parsimony. I would take the common sense approach and say that "good news causes the price to jump; bad news causes the price to fall" is sufficient. The fact that this would be "priced in" to a more complicated model is not enough to spare this model from Ockham's Razor - it must be cut loose if the simple fact itself is sufficient. There's some sophistry for you!
As I said before I do respect the effort you put into explaining your work and your work itself, but please don't discount something you perceive as "unscientific" - especially if you claim that it may all be "priced in" already. Incidentally that is what lies at the root of your debate with me. I never criticized your prediction; I just said "whoops look how the news broke the fractal pattern". It was a simple point about news. You could have agreed and added that it was priced in to your model. Agreement across the boundary between science and common sense - nothing wrong with that!
PS. Congratulations on predicting this upwards breakout!