Author(s)

L.O. Södahl

Abstract

Price movements in international speculative markets are the aggregate result of thousands of independent daily decisions, and should thus abundantly satisfy the requirements for random behaviour. However, market practitioners generally believe in systematic influences, such as \“trends”. But there is no scientifically acceptable proof that such trends do in fact exist. This case study is an attempt at a computational approach to this question, based upon Volvo monthly high/low stock prices over 18 years. \“Trend-lines” can be drawn through the price chart, lines which with high precision run through a number of extreme price values. Is this precision a mere coincidence or is it systematic? Stock prices are projected on a baseline perpendicular to the trend. That means that all observations lying on or

Keywords