# Last edited on 2014-02-21 22:57:53 by stolfilocal

[b]Checking the Chinese Slumber Method predictions for feb/21[/b]

The prediction for today Feb/21 was again way off the mark:

Prediction posted on: Friday 2014-02-21, 01:35 UTC 
Prediction valid for: Friday 2014-02-21, 19:00--19:59 UTC 

Huobi's predicted price: 3772 CNY
Huobi's actual price (L+H)/2: 3425 CNY
Error: 347 CNY

Bitstamp's predicted price: 616 USD
Bitstamp's actual price (L+H)/2: 563 USD
Error: 50 USD

During most of the day the price was rising steadily, recovering from yesterday's fall and aiming straight towards the prediction. But around 14:00 UTC (22:00 China Standard Time) there was another sudden and significant drop to 3400, and was still there when the traders went to bed.  

The Huobi prediction in question is the rightmost blue rectangle on the chart below.  The light blue-gray rectangles are the previous predictions.  The orange and grey dots are the True and False Slumber Points, the mean prices at 19:00 UTC every day.  The orange line is the trend that was assumed for the prediction.
[url=http://www.ic.unicamp.br/~stolfi/temp/2014-02-21-prediction-check-HUBI-annotated.png][img width=600]http://www.ic.unicamp.br/~stolfi/temp/2014-02-21-prediction-check-HUBI-annotated.png[/img][/url]

The following chart shows the Bitstamp prices and predictions. The orange and grey dots are [b]Huobi[/b]'s prices at 19:00 UTC every day, divided by R (6.40 for Feb/07--09, 6.12 for all other days).  The orange line is the trend used in the prediction, which is Huobi's trend divided by R.
[url=http://www.ic.unicamp.br/~stolfi/temp/2014-02-21-prediction-check-BSTP-annotated.png][img width=600]http://www.ic.unicamp.br/~stolfi/temp/2014-02-21-prediction-check-BSTP-annotated.png[/img][/url]


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[b]Chinese Slumber Method prediction for Feb/22[/b]

Today Feb/21, Huobi's volume for 19:00 -- 19:59 UTC (3:00--3:59 AM China Standard Time) was only 407 BTC, which, by the criteria I have been using, makes it a True Slumber Point. 

Also by those criteria, one must conclude that the trend that fitted neatly all the 7 True Slumber Points from Feb/11 to Feb/19 (gray line) is no longer valid.  It seems that the "Second Karpeles Catastrophe" (the unsatisfactory release by MtGOX) on Feb/20 caused [b]a sudden and permanent drop in price by ~350 CNY[/b]. 

For the next prediction, therefore, I must assume a new trend.  By the rules, I have only one valid data point, 3425 CNY at Feb/21. I will therefore assume that the new trend goes though that point and has the same slope as the previous trend, namely minus ~29 CNY per day.  For Bitstamp, as usual, I will use Huobi's prediction divided by R = 6.12.

And I will pray that MtGOX does not post a new press release.

Therefore:

[b]Prediction valid for:[/b] Thursday 2014-02-22, 19:00--19:59 UTC (not before, not after)
[b]Huobi's predicted price:[/b] 3396 CNY.
[b]Bitstamp's predicted price:[/b] 555 USD.

[url=http://www.ic.unicamp.br/~stolfi/temp/2014-02-21-prediction-make-HUBI-annotated.png][img width=600]http://www.ic.unicamp.br/~stolfi/temp/2014-02-21-prediction-make-HUBI-annotated.png[/img][/url]

[b]NOTE[/b]: Again, if you lose money because you trusted these predictions, you made at least two serious mistakes.