[jeletonskelly]

Isn't that what quantitative trading is?

[mruts]

Quantitative trading isn't trying to predict the S&P500. It's trying to predict the distribution of returns, which is a (slightly) easier problem. Quants are just trying to make money, not predict the future. And judging by the returns of quant funds like Bridgewater or Renaissance, the answer is that while they might not be able to predict the S&P, they can generate alpha year over year.

[ivalm]

I think most quants trade on

1) volatility (ie mis-pricing of the expected distribution of returns) 2) front running large orders 3) rapid news analysis

I don't think there is a successful model for market directional prediction based on previous price action (ie charting).

[codesushi42]

No. Hedge funds make money on asset allocation and asymmetric information, i.e. exclusive market information (see Quandl). They don't make alpha with complex trading rules.