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← From EMH to Adaptive Dynamics

Markov-Switching Models: Mechanics and the Lag Problem

Part 2 of 3 · coming soon

This is where Adaptive Dynamics gets a mathematical body — and where it becomes clear that adaptation isn't free, it costs time. Hamilton filtering and smoothing recover a hidden regime from SPX data, and the gap between the two reveals a structural detection lag: the market can only see price, and price is a lagging witness to whatever is actually shifting underneath.


← Part 1