Patent ID: 7337135

Claim:
A method for forecasting the direction in which the price of an asset will move, said method comprising: (a) identifying a group of exogenous variables that are likely to influence observed prices of an asset; (b) utilizing a computer to execute computer-executable process steps that include steps to: (i) process historical data for values of said exogenous variables and historical data for the observed prices of the asset over a time period to obtain a formula for calculating price estimates for the asset as a function of the exogenous variables; (ii) calculate the formula using an input set of observed values for the exogenous variables at given point in time, so as to obtain a price estimate for the asset at said given point in time; and (iii) determine a similarity measure by comparing the price estimate for the asset at the given point in time to the observed price for the asset at the given point in time; and (c) forecasting a direction in which the observed price of the asset will move based on the similarity measure.