USMarketView

November 9, 2007

This week closed as it opened: down — and saw only one positive day, on Tuesday.

While negative weeks are not unusual –there have been 155 of these, or 39 percent of all, since 2000- this week’s decline is far greater than the median. Indeed, the minus 6.49 percent NASDAQ loss this week is the deepest since April of 2000. The DJIA and the S&P500, as shown in the table below, marked similar drops.

As for Friday’s results, the third straight negative trading day in a row, the three indices lost big. The NASDAQ, dropped -2.52 percent, far in excess of its median loss of -1.37 percent for the third successive down day. The DJIA’s loss of -1.70 percent also exceeded its third straight decline median of -.62 percent. The S&P500 was off -1.44 percent, again almost double its median thord day loss of -.78 percent.

Looking forward to Monday, the record since January 2000 indicates that a fourth straight loss fpr the S&P500 and the DJIA occurs less often than a positive close after three successive losses. For the NASDAQ, however, the likelihood is about equal. The same result holds for the median changes, with the positive gains larger than the lossess, with the exception, again, of the NASDAQ

November 8, 2007

The market closed lower for a second day, with the S&P500 losing just -.06 percent and the DJIA off by -.25 percent.

The NASDAQ index though fell some -1.92 percent. While this index has closed down on 936 trading days since January 2000, only 247 of these have been deeper than today’s decline.

Considering tomorrow, in the past, a third negative day for the NASDAQ occurred 527 times, with a median loss of -.64 percent, while 488 positive closes followed two days of declines, posting a median gain of .52 percent.

November 6, 2007

The S&P500 led the advance, increasing 1.20 percent, while the NASDAQ gained 1.07 percent and the DJIA closed up .87 percent.

Nevertheless, the market fails to set a definitive direction: with this positive close following yesterday’s decline, this is the eight day trading day in a row where the market has changed it’s course, and moved in the opposite direction of the day before.

Posted November 7.

November 5, 2007

The indices made a strong recovery from today’s lows, but failed to close on the upside.

The NASDAQ was off -.54 percent, the S&P500 shrunk -.50 percent and the DJIA was off - .38 percent.

The chart below shows how the three indices whipsawed in the last seven trading days.

Lengthy chains of daily fluctuations like these are rare. There are only four repeats of this pattern for the S&P500 since January 2000, with a median loss of -.27 percent. While the DJIA and the NASDAQ indices had just two repeats, with median decreases of -.28 percent and -.17 percent, respectively.

Posted on November 5

November 2, 2007

Friday, the second day following a Fed Fund rate cut, the indices eked out small gains. The S&P500 closed up .08 percent, the DJIA rose .20 percent and the NASDAQ led with a plus .56 percent.

While this small recovery – after Thursday’s steeper than minus two percent losses – may be disappointing, it is, nevertheless, in line with the record of the thirteen previous Fed Fund cuts.

Consider the data in the following table. It summarizes the number of positive and negative changes, and their median values, two trading days after cuts in the Fed Fund rate:

Positive Closes Negative Closes

Index # Median # Median

DJIA 4 + .40% 9 - 1.03%

NASDAQ 5 + 1.65% 8 - 1.09%

S&P500 4 + .30% 9 - .85%

Negatives are about twice as common as positive changes, and with the exception of the NASDAQ, in the minority of cases, when there are gains, these are less than half the median decline.

In sum, Friday was not a bad day. While the indices were only slightly positive, they did better on this second day after the Fed rate cut than in nine or (eight for NASDAQ) of the previous Fed actions since January 5, 2001.

Posted on November 3.