A new method, based on the original theory of conservation of sum of kinetic and potential energy defined for prices is proposed and applied on the Dow Jones Industrials Average (DJIA). The general trends averaged over months or years gave a roughly conserved total energy, with three different potential energies, i.e., positive definite quadratic, negative definite quadratic and linear potential energy for exponential rises (and falls), sinusoidal oscillations and parabolic trajectories, respectively. Corresponding expressions for force (impact) are also given.
International Journal of Modern Physics C
- Pub Date:
- econophysics financial markets business and management;
- Physics - Physics and Society;
- Physics - Computational Physics;
- Quantitative Finance - Statistical Finance
- 14 pages, 3 figures, scehudled for IJMPC 17/ issue 6