THE DOW JONES INDUSTRIAL AVERAGE (DJIA) STOCK MARKET INDEX AND THE CHAOTIC GROWTH MODEL
THE DOW JONES INDUSTRIAL AVERAGE (DJIA) STOCK MARKET INDEX AND THE CHAOTIC GROWTH MODEL

Author(s): Vesna Jablanović
Subject(s): Social Sciences, Economy
Published by: Udruženje ekonomista i menadžera Balkana
Keywords: DJIA index; Stability; Elliot waves; Chaos.
Summary/Abstract: The Dow Jones Industrial Average (DJIA) index includes the stocks of 30 of the largest companies in the United States. It represents about a quarter of the value of the entire U.S. stock market. The changes in the DJIA index are often considered to be representative of the entire stock market. The basic aims of this paper are: firstly, to create the simple chaotic the DJIA stock market index growth model that is capable of generating stable equilibria, cycles, or chaos; secondly, to analyze the local stability of the DJIA index movements in the period 1982-2009; and thirdly, to discover the equilibrium level of the DJIA index in the observed period. This paper confirms the existence of the stable convergent fluctuations of the DJIA index in the observed period. Also, the golden ratio can be used to define the equilibrium level of the DJIA index in the presented chaotic model.

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