https://doi.org/10.1007/s100510070150
Determining bottom price-levels after a speculative peak
LPTHE, University Paris 7, 2 place Jussieu, 75005 Paris, France
Received:
9
June
2000
Published online: 15 September 2000
During a stock market peak the price of a given
stock ( i ) jumps from an initial level 
to a peak level
before falling back to a bottom level 
. The
ratios 
and 
are referred to
as the peak- and bottom-amplitude respectively. The paper
shows that for a sample of stocks there
is a linear relationship between A(i) and B(i) of the
form: B=0.4A+b . In words, this means that the higher the price of
a stock climbs during a bull market the better it resists during the
subsequent bear market. That rule, which we call the resilience pattern,
also applies to other speculative markets.
It provides a useful guiding line for Monte Carlo simulations.
PACS: 64.60.Fr – Equilibrium properties near critical points, critical exponents / 87.23.Ge – Dynamics of social systems
© EDP Sciences, Società Italiana di Fisica, Springer-Verlag, 2000
