A NEUROFINANCE VIEWPOINT OF THE ROLE OF S&P 500 SIGNAL’S SPECTRAL PROPERTIES ON VISUALLY OPTIMISTIC AND PESSIMISTIC REPRESENTATIONAL MOMENTUMS
A NEUROFINANCE VIEWPOINT OF THE ROLE OF S&P 500 SIGNAL’S SPECTRAL PROPERTIES ON VISUALLY OPTIMISTIC AND PESSIMISTIC REPRESENTATIONAL MOMENTUMS

Summary/Abstract: In this paper, we explore the role of financial signal’s spectrum on visual representational momentums and its effectiveness as visual attention allocation strategy during a financial visual extrapolation task. This paper aims to understand whether visual attention is allocated more on looking into the “bright” or “dark” future, and whether such a visual attention allocation choice is indeed strategically effective. Preliminary results indicate that spectral properties of the S&P 500’ signal do have a statistically significant role on generating visually optimistic and pessimistic representational momentums, which is statistical evidence for behavioral markers responsible for visual extrapolation capabilities which human observers have developed throughout evolution. Further results of the analysis indicate that the effectiveness of such strategic visual extrapolation capability is indeed influenced by spectral properties of the S&P 500’ signal which biases twice as much the extrapolation effectiveness by lowering it for cases when visual attention is allocated on the “bright” financial future compared to when the visual attention is allocated on the “dark” financial future of the financial graph that is being visually extrapolated. We conclude that financial extrapolation as a predictive tool is much more than a statistical and computational endeavor and investors do have the capability to mentalize the visual representational momentum and to make use of this as a tool for an effective visual extrapolation of the financial graphs.

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