A Budding Romance: Finance and AI

Predictive Analytics and the Week’s Best Trade Ideas

"Well, Dick, here’s the deal. I’m the best there is. Plain and simple. And nobody can handle my stuff. I’m just a big hairy American winnin’ machine. If you ain’t first, you’re last. You know, you know what I’m talkin’ about?"

-Ricky Bobby, Talladega Nights, 2006

One of the greatest benefits we see at EidoSearch, and with our new methodology for prediction, is the ability to quantify the value of information contained in data sets and especially Big Data. For example, is it even worth spending months of time analyzing traffic patterns in parking lots at shopping malls? The other great benefit is that once you’ve identified that valuable information exists in a data set, you need the ability to interrogate the data with speed and accuracy to generate meaningful analytics and ongoing signals to help drive business decisions.

Lumber’s Going Higher….And Homebuilders?

"Walter Fielding - It doesn’t make any sense, why would somebody be selling a million dollar house for a hundred thousand? Jack - Who knows? A divorce, loan sharks, a scandal. The point is you get to capitalize on another human being’s misfortune. That’s the basis of real estate. So, do we have a deal?"

-The Money Pit, 1986

Lumber is cheap right now….relatively speaking anyway. After peaking at over $400 in March of 2013, prices have been in a steady decline. They hit a four year low of around $215 in late September, and after a mini rebound in October, they are headed down once again.

Precedence and Projections for Crude in 3 Months

"If I told you I knew a place that had oil, where land could be bought cheaply, what do you think that would be worth?"

-There Will Be Blood, 2007

If I told you that we’ve seen Crude Oil trade in a similar fashion historically, and that the probabilities greatly favored a rebound in the next three months vs. continued deterioration, what do you think that would be worth? (Subscription offer at the end).

EidoSearch CEO and Co-Founder Steven Zhang to Speak at QWAFAFEW Event

During the discussion, Dr. Zhang will review the concept of machine learning, including deep learning and traditional modeling for big data predictive analytics. He will also introduce a new big data modeling paradigm, namely, data incidence based (DIB) modeling.

Likelihood of Another Big Pull Back for the S&P?

"May the odds be ever in your favor. "

-Hunger Games, 2012

After the S&P 500 dropped 11% over six days back in the middle of August, consensus was building for a continued drop to more reasonable valuations. At a minimum, expectations were being set for minimal gains from equities for the foreseeable future. The Global economy was struggling, commodities were leading the earnings per share slowdown and it seemed all but certain we would see the first rate hike in September. This was the pull back that we had all been anticipating.

Goldman Going Higher?

"China saves too much, produces too much, sells too much to Americans and consumes too little. "

-Henry Paulson

After an uneven reporting of earnings last week for the largest U.S. Banks, we thought it would be interesting to see if any patterns were emerging that contained valuable information and carried the same kind of compelling probabilities as last week and that might be worth analyzing. The most interesting by far is Goldman Sachs (GS).

Probabilities Support a Rebound in Biotech

"Price gouging like this in the specialty drug market is outrageous. Tomorrow I’ll lay out a plan to take it on."

-Tweet from Hillary Clinton on September 21st

Thanks Hilary! Although, to be fair, she may have just exacerbated the issue. Biotech’s had been on an all-time run since January 2012. The Nasdaq Biotech Sector ETF (IBB) was up over 250% through July 20th of this year, thoroughly outperforming the market which was up a mere 57% through the same period. The sector seemed ripe for a pull-back on valuations.

EidoSearch President and Co-Founder David Kedmey to Speak at the International Traders Expo in Las Vegas

David Kedmey, President and Co-Founder of EidoSearch, is among a select group of Fintech entrepreneurs to discuss the new institutional quality financial tools, research sources, and technologies that are leveling the playing field for active investors and traders. The Panel discussion titled, “New Fintech and Media Tools for Active Investors” will take place on Thursday,

Yahoo! (YHOO) Rebound Short Lived

"Auburn is a pretty good school. To graduate from there I suppose you really need to work hard. 20 pts and 10 rebounds will get you through also."

-Charles Barkley, NBA Hall of Fame

In mid-November of last year, Yahoo! Inc shares went above $50 for the first time in 14 years (dot com), and were up from just $15 a share when Marissa Mayer took over as CEO in July 2012. Jump on the wagon!

Not so fast. Shares have been in a steady decline since, bottoming last Monday at $27.60. Yahoo! then announced that, screw it, they were spinning of Alibaba regardless of tax consequences and the stock jumped 11% last week. Sustainable?

Gold is Going Down

"We’re going to Hell, so bring your sunblock."

-Ari Gold, Entourage

For those of you excited about Gold’s move up over the past week and the Fed’s continued concerns on global economic growth, we offer a sobering fact: In 13 similar trading environments in the last 40 years, Gold has never been up in the next one month.