In the same category

Lottery Odds Events Keeping Gold and Silver Prices Contained

IMG Auteur
Published : October 05th, 2011
268 words - Reading time : 0 - 1 minutes
( 5 votes, 2.8/5 ) , 3 commentaries
Print article
  Article Comments Comment this article Rating All Articles  
0
Send
3
comment
Our Newsletter...
Category : Gold and Silver

 

 

 

 

From Bill Murphy’s Lemetropolecafe.com “Midas commentary” on Friday, Sept. 30, 2011:

 

HSBC has published an interesting study of the recent precious metal volatility:

"Based on almost 40 years of data, the drop in gold prices last week represented a 3 standard deviation move, down 8.54%. According to the data, this has occurred only seven times since gold became freely convertible in 1972. This made the week ended 23 September the seventh-worst week in terms of percentage price performance in almost 40 years of trading, or more than 2,000 weeks.

The last time volatility was this high was in the week ended 21 March 2008, when Bear Stearns collapsed. To find higher weekly volatility levels,we have to go back to the first week of March 1983, when gold prices dropped more than 11%...

Based on 41 years of data, the drop in silver prices last week represented a 5 standard deviation move, falling 23.42% for week ended 23 September. According to the data, declines of this magnitude are rare and have occurred only four times since 1970"

 

I was so taken with the news that HSBC is reporting that silver’s most recent fall in price was a 5 std. deviation move – I asked good friend and resident Ph.D. [Dr. Jim Willie] in statistics what the odds are of a 5 standard deviation move.

 

His Reply:

ANSWER :  1 in 1.744 million

any questions, just ask

/ jim

 

Devs

bell interior prob.

tail probability

odds

1

0.84134474607

0.317310508

3.151

2

0.97724986805

0.045500264

21.978

3

0.99865010197

0.002699796

370.398

4

0.99996832876

6.33425E-05

15,787

5

0.99999971335

5.73303E-07

1,744,278

6

0.99999999901

1.97318E-09

506,797,317

 

 

<< Previous article
Rate : Average note :2.8 (5 votes)
>> Next article
Rob Kirby received his post secondary education at York University [Economics] in Toronto. Upon completion he worked on an institutional trading desk for most of the 1980s and right up until 1996. Mr. Kirby began writing in 1997 and was involved in a number of entrepreneurial pursuits. In 2002, he went to work for Investor's Group, the largest Mutual Fund Company in Canada until September '04 when he resigned to write about the markets.
WebsiteSubscribe to his services
Comments closed
  All Favorites Best Rated  
The issues of whether or not markets are rigged,politically interfered,economically unsound,overbought/sold etc are irrelevant to the way i trade.
In terms of points, I make small wins, small losses and moderate to very large wins.
Likely my method is rare, as i have not read of anyone who trades in a similar manner.

SW
A rare event no doubt.
So what?
The price of silver could continue to fall,eventually rise above, say the 200 DMa, and be a lot lower in price than what it is today.
Just a thought.

SW
The Gold and Silver prices could go anywhere THEY want them to, that is the beauty of a rigged market.
Latest comment posted for this article
The issues of whether or not markets are rigged,politically interfered,economically unsound,overbought/sold etc are irrelevant to the way i trade. In terms of points, I make small wins, small losses and moderate to very large wins. Likely my method is ra  Read more
S W. - 10/7/2011 at 7:20 PM GMT
Top articles
World PM Newsflow
ALL
GOLD
SILVER
PGM & DIAMONDS
OIL & GAS
OTHER METALS