USMarketView

February 29, 2008

All three indices suffered significant hits this week: the deepest loser, the S&P500, dipped -1.66 percent from last Friday; the NASDAQ was off -1.38 percent from a week ago, and the DJIA, while losing the least, still took a -.93 percent hit.

The Friday-to-Friday performance for the last nine weeks -from January to today- is weighted heavily to the negative side. The NASDAQ had only two positive weeks, while the DJIA and S&P500 had four weeks on the plus side.

The figure below shows the extent of the losses suffered each week. The median loss of the S&P500 is almost five times as large as the median gain. The DJIA has a better record: its median loss at -4.02 percent is still much larger than the 1.13 percent median gain.

This contrasts sharply with last year’s January-February results, where the median gain of each index was at least twice as large as the median loss.

DJIA - 2.51 percent
NASDAQ - 2.58 percent
S&P500 - 2.71 percent

February 28, 2008

The S&P500, losing -.89 percent, following Tuesday’s -.09 percent decline, is now down two days in a row. The DJIA and the NASDAQ also backed off on Thursday, failing to extend their positive runs, and missing the opportunity to score five advances in a row.

December 24 is the last time that the NASDAQ achieved five straight daily advances. So while there have been no repeats so far this year, this index scored seven runs of five upticks in a row last year: the first one on January 12, 2007 and the second on February 1.

The DJIA had six such runs last year; the first achieved on February 20, and has had no repeats since July 17, 2007.

DJIA - .88 percent
NASDAQ - .94 percent
S&P500 - .89 percent

February 27, 2008

For the first time this year, these indices managed to close higher for the fourth trading day in a row. The DJIA scored only 75 such runs since January 2000, with 13 occurring in 2007. Overall, since 1950, positive four day results account for only four percent of all closes.

The NASDAQ has 471 such sets since its inception in 1971. Whereas this figure represents five percent of all trading days, there were only 11 of these in 2007 and 65 since 2000.

As for the next trading day, since 2000, the DJIA continued to move higher on just 32 days, but fell on 42 days.

The NASDAQ scored further advances on 33 days and had only 31 days with a lower close.

DJIA .07 percent
NASDAQ .37 percent
S&P500 - .09 percent

February 26, 2008

All three indices moved higher today for the third consecutive trading day. This is the second such string in 2008, with the last occurrence just two weeks ago.

While Tuesday’s gains were not large, the S&P500 advance of .69 percent is the 13^th largest this year, and there were just 50 days last year with better performance.

The .75 percent increase of the NASDAQ is the ninth largest of the year, and in 2007, only 60 closes did better.

The DJIA has similar results: only eight other days this year provided larger gains, while there were 31 days in 2007 exceeding today’s .91 percent.

DJIA .91 percent
NASDAQ .75 percent
S&P500 .69 percent

February 25, 2008

The three indices moved up by more than one percent on Monday, scoring the second improvement in as many trading days.

Of the 383 Monday trading days since January 2000, the NASDAQ had slightly less than half, 196 days, positive; the S&P500 had 199, and the DJIA led with 204.

As for the day after, the same ratios, more or less, prevailed for Tuesdays, with each index having roughly half as many up closes than on Mondays.

DJIA 1.53 percent
NASDAQ 1.05 percent
S&P500 1.38 percent

February 22, 2008

The DJIA and the S&P500, though they closed higher by less than .25 percent than a week ago, managed to score their fourth Friday to Friday advance this year. But the -.79 percent decline of the NASDAQ, means that this index has been able to move to higher valuation in only two of the eight Fridays so far in 2008.

These results are not out of the ordinary: the DJIA has the best history of weekly advances in January and February, but it achieved only a 54 percent ratio of positive weekly changes, since January 2000.

The S&P500 did not do as well; having only a 50/50 record of positive/negative Friday to Friday closes. The NASDAQ comes in last, with just 41 percent of its weekly closes higher than the week before.

The story on the median value of these weekly changes reveals that the DJIA had a positive median in merely four of the nine years, starting in 2000. That is, the median weekly change in the first two months of the year shows an advance less than 50 percent of the time. The NASDAQ and S&P500 did not score as well, their median was positive in only three of those nine years.

The weekly performance in the first two months of the year, it seems, does not yield a meaningful insight into the performance of these indices for the rest of the year.

DJIA .78 percent
NASDAQ .16 percent
S&P500 .79 percent

February 21, 2008

With today’s decline, the S&P500 has registered the fifth day of alternate closes: down today, up yesterday, down the day before … This now the 38^th of such strings since January 2000.

And 28 of these sequences took place when the market was in a long decline. While the other nine occurred when prices were regaining and approaching their previous record high. See the figure below.

Perhaps this is not a pattern signaling decay in prices, merely coincidence, but caution dictates that the alternative -it’s a signal- deserves attention.

DJIA -1.15 percent
NASDAQ -1.17 percent
S&P500 -1.29 percent

On the figure below, the S&P500 close is marked by a circle. The line connecting these circles  provides perspective on the time path of this index; it does not represent actual prices, only the circles do.

February 20, 2008

The indices moved higher today, for the first time since last Wednesday, (with one exception: the S&P500 advanced on Thursday, but by less than 1/10^th of a percent).

Today’s gains are in line with the pattern established so far in this year’s 33 trading sessions. The NASDAQ record shows 13 positive closes, with a median increase of .98 percent -quite close to today’s .91 percent improvement.

The DJIA index tells the same story: a median advance of .88 percent in its 15 separate up days, whereas it scored a plus .73 percent today. There were 15 positive closes for the S&P500 so far in 2008, having a median gain of .83 percent, equal to the present close of .83 percent.

In comparing these 33 days with the same period in 2007, the magnitude of the 2008 decline becomes obvious. The NASDAQ lost 12.14 percent so far this year, and gained 3.58 percent in the same 2007 period. The DJIA declined 4.96 in 2008 but increased 2.44 percent in the first 33 trading days of 2007; and the S&P500 fell 6.41 percent in the first 33 trading days of 2008, compared to its 2.95 percent advance in the similar period of last year.

DJIA .73 percent
NASDAQ .90 percent
S&P500 .83 percent

February 19, 2008

While the NASDAQ was off -.67 percent, both the DJIA and the S&P500 were down just -.09 percent. These declines are close to the median change, in the last eight years, for the Tuesday after the Presidents’ Day holiday.

But the range of gains and declines is so large that these medians fail to provide a meaningful indication of the typical trading day result. The NASDAQ’s steepest fall off since 2000 is -4.41 percent and its greatest increase is 2.78 percent. Yet its median change comes to just -.76 percent. So whereas today’s loss of -.67 percent is smaller than the median of the last eight years, this statistic falls short of telling us just what could happen.

The historical statistics for the Wednesday of the holiday week should be interpreted in the same wary manner. Even though there as many up days as declines -the S&P500 has four of each, the DJIA has five gains and three losses, and the NASDAQ’s record is three gains and five losses- and the median changes range from -.21 percent to plus .21 percent, the closes since 2000 range from -2.13 percent to plus 3.84 percent for the NASDAQ, -1.90 percent to plus 2.01 percent for the DJIA, and -1.85 percent to plus 1.35 percent for the S&P500.

DJIA -.09 percent
NASDAQ -.67 percent
S&P500 -.09 percent

February 15, 2008

Even though three of the last five days were losers, this week’s closes were higher than last Friday. The DJIA and the S&P500 gained almost 1.5 percent, whereas the NASDAQ increased by .74 percent.

This is only the third positive week of the year for the DJIA and S&P500, with most of these percentage gains smaller than the losses in each of the four negative weeks. (See the diagram.) The NASDAQ, however, has only scored gains in two of the last seven weeks.

On Friday itself, the S&P500 index increased slightly, while the DJIA declined by -.23 percent and the NASDAQ fell -.46 percent. While daily changes in the individual indices are usually in the same direction, non-uniform patterns do occur. But since January 2000, there were only 16 days where the S&P500 increased when the other two declined.

DJIA -.23 percent
NASDAQ -.46 percent
S&P500 .08 percent