Logistic function in large financial crashes

Abstract

This chapter examines the signatures that arise after large financial crashes in order to evidence the presence of logistic growth in indices of markets that validates the hypothesis of symmetry on the trend before and after the crash. It is also shown how the probability meaning of the logistic function can be exploited in order to set up a bayesian analysis model. The large crash in the NASDAQ 100 composite index which occurred in April 2000 is presented as a case study. © 2006 Springer-Verlag Berlin Heidelberg.