USMarketView

January 31, 2007

Moving higher by more than 1.65 percent today, the indices had their best day of the week.

This is the fifth time that the Fed cut its Fed Fund rate since last September, and four times, including today, the indices posted gains on the next day. And the NASDAQ increase of 1.74 percent on Thursday is its largest response in this cycle of Federal Reserve action.

The indices also increased on the second day after the announcement, with just one exception, while the largest increases, on the day after since last September’s cut were 1.01 percent for the S&P500 and .88 percent for the DJIA.

DJIA 1.67 percent
NASDAQ 1.74 percent
S&P500 1.68 percent

January 30, 2008

The widely anticipated Fed Funds rate cut became a reality today, and even though they reduced it by a full 50 basis points, after a brief flurry, the market declined, but not by much.

This is in line with the recent pattern of declines on the Fed’s announcement date. While this is the fifth rate decrease since last September, the indices moved up only twice on the announcement date, and both occurred last year.

But advances may occur tomorrow, for the market moved higher the day after the announcement in three of the last four Fed Fund cuts. And that one exception took place last October.

Since 2000, on the day following the Fed’s announcement, the NASADAQ and the S&P500 indices gained six times while decreasing nine times; the DJIA is more balanced between losses and gains, having eight increases and seven losses.

Yesterday’s analysis focused on the fact that three successive up days have eluded these indices since December 21 (and for the NASDAQ since December 19). And while Tuesday’s result was the second positive day in a row, today’s declines means that this is the 24^th trading day without a positive run lasting at least three days. By contrast, last year, the NASDAQ scored three consecutive up days 21 times; that averages to one such string every 12 days. The DJIA scored one every 13 days on the average, while the S&P500 averaged one every 15 days.

DJIA - .30 percent
NASDAQ -.38 percent
S&P500 -.48 percent

January 29, 2008

The three indices moved up again, but their increases failed to match Monday’s level. And while today marks the third time this year that the averages posted two gains in a row, they have not yet managed a longer string.

In fact the last time we had three straight positive closes was toward the end of December 2007, some 23 trading days ago.

Yet in the 250 trading days of 2007, the NASDAQ index turned in a third positive day 21 times, or at the rate of one every 12 days. The DJIA, with 19 of these had a positive third day every 13 days, and the S&P500 had an average of once every 16 days.

So tomorrow’s results will be an important indicator.

DJIA .78 percent
NASDAQ .35 percent
S&P500 .62 percent

January 28, 2008

Stocks started the week on an upbeat, with each of the indices advancing at least one percent.

The S&P500 increased by 1.76 percent, which one whole percentage point better than the median gain scored when this index increases after a down day, which follows two successive gains.

While the DJIA also bettered its median advance by almost ¾ of one percent, the NASDAQ just about equaled the median gain for this closing pattern.

On the following day, since January 2000, both the DJIA and the NASDAQ scored more up closes than declines. The DJIA’s ratio is 42 up days to 38 down days, and the NASDAQ ratio is 38 up to 30 down. The S&P500, however, has more frequent declines -47- than its 32 increases.

DJIA 1.45 percent
NASDAQ 1.02 percent
S&P500 1.76 percent

January 25, 2008

Today’s losing session was the second for the week, and despite the colossal cut in the Fed Funds rate, the market could not sustain Wednesday’s and Thursday’s increases.

Yet the DJIA gained .89 percent for the week while the S&P500 closed .41 percent higher than last Friday. The NASDAQ however lost -.59 percent this week.

Even though we had three losing weeks (four for the NASDAQ) this month, this is not unusual for January. Only 18 of the 38 January weeks since 2000, closed higher, with declines in the other 20 weeks.

Indeed, three negative weeks occurred not only this year, but also in 2000, 2003, 2005, and 2007. And only some of those years were big losers, while others scored equally impressive gains.

DJIA -1.39 percent
NASDAQ -1.47 percent
S&P500 - 1.59 percent

January 24, 2008

The NASDAQ led the advance, increasing 1.92 percent; the S&P500 came in second with a plus 1.00 percent, while the DJIA moved up by .88 percent.

Looking at how often these indices scored such gains since January 2000, rather than taking just today’s change, the comparison was made using a range of minus and plus .05 percentage points from today’s rise.

The DJIA has 49 such closes, the S&P500 has 48, and the NASDAQ comes in third with 29. Moreover, the historical median percentage change turns out to be exactly equal to today’s percentage change for each index.

DJIA .88 percent
NASDAQ 1.92 percent
S&P500 1.00 percent

January 23, 2008

All three indices put an end to the five successive downturns, and finished the day scoring substantial gains. The DJIA and the S&P500 moved up over two percent, while the NASDAQ increased by 1.05 percent.

The chances of another down day –to make it the sixth-in-a-row decline- were small. There have been only two of these for the S&P500, 9 for the DJIA and 13 for the NASDAQ since January 2000.

On the other hand, a situation like today –that is, a positive close after five straight declines- occurred 14 times for the S&P500 and11 times for the DJIA, while the NASDAQ scored 18 advances.

Looking at the results of the next day, that is did the market continue higher or did it decline, the data show that there were just about as many advances as declines since January 2000. About nine days with price increases and the same number of declines. Yet the losses on the down side were more substantial than the up day gains.

The NASDAQ median loss comes to – 2.29 percent, while its median gain was just .66 percent. The S&P500 median loss of -1.26 percent is more than twice as large as its .50 median gain. On the other hand, the DJIA experienced about equal increases and decreases: -.98 percent is the median loss while .81 percent is the median gain.

DJIA 2.50 percent
NASDAQ 1.05 percent
S&P500 2.14 percent

January 22, 2008

Despite the Fed’s massive 75 basis point cut in the Fedeeral Fund rate, all three indices fell again. Today’s close, after a long weekend, was the fifth straight decline.

There have been only 18 such strings recorded for the S&P500 since January 2000; The DJIA has 21 while the NASDAQ fell for five successive sessions 32 times.

The median drop on these fifth straight decline days is -1.09 percent for the S&P500 while the DJIA median is -1.05 percent. And today’s results mirror that statistic as the S&P lost -1.11 percent and the DJIA fell -1.06 percent.

The NASDAQ record, however, shows 32 such successive declines, with a median fall of -.75 percent. Today’s drop was much steeper, at -2.04 percent

To relate these results to, and to see how they occurred in, the losing days of the 2000-2002 period, consider these statistics: during that long decline, the DJIA had 94 consecutive three day losses, but only 80 days with three consecutive plus closes.

The NASDAQ score is 107 straight three day declines compared to 94 such positive closes.

The S&P500 was down three days in a row on 94 occasions but had just 62 positive three day runs.

The following figures show these results in graphic form, with the number of consecutive up and down days compared to the overall declines in these three indices.

January 18, 2008

The indices were hit hard this third week in January. The S&P500 fell -5.41 percent between the last two Fridays; the NASDAQ lost -4.1 percent and the DJIA dropped -4.02 percent. Moreover, today’s Friday to Friday loss not only follows last week’s decline: this is the fourth such week in a row. These averages have failed to score a week over week advance since Friday, December 21, 2007.

Such a long negative run is not usual at all. In the 395 weeks since January 2000, there have been only 17 four negative weeks runs for the DJIA; and the last string occurred on July 2004. The S&P500’s record is similar, with 18 sets of four week declines. None of these took place during the month of January. The NASDAQ has a more frequent record: 26 four week declines, with the last one on December 2005.

The magnitude of this week’s decline should be noted as well: only five percent of the DJIA and the S&P500 weekly losses, since 1950, have exceeded their turn down this week. The NASDAQ decrease is somewhat better, in the 10^th percentile.

The data for five straight negative weeks reveals that both the DJIA and the S&P500 have ten such runs since 2000, while the NASDAQ has eleven. All of these took place before July 2004.

January 17, 2008

Stock prices, down for the third day in a row, lost as much as 2.91 percent-the S&P500- at the close.

There have been 114 three-successive-down-days since January 2000; that is a little more than one trading session in twenty.

Dips as deep as minus two percent on the third consecutive day are uncommon; the DJIA had only five in this century, the last one in 2002. The S&P500 had nine, and also non since 2002. The NASDAQ leads this category with 13, the last of which was last month, in December 2007.

Looking at the record to see what might be in store, the table shows that the NASDAQ had as many up days as down days after three consecutive losses. The DJIA has a greater ratio: 1.3 up days for every down day, while the S&P500 leads this category with a ratio of 1.65 up to down days.

DJIA -2.46 percent
NASDAQ -1.99 percent
S&P500 -2.91 percent