USMarketView

March 5, 2008

All three indices moved up today; their closing, within just about one half percent of yesterday, repeats the experience of Monday and Tuesday.

There is a definite relationship between the size of daily changes when the market is rising and when the market is falling. This was experienced in the last contraction and expansion.

When prices were decreasing, from March 2000 to October 2002, about 43 percent of the S&P500 and the DJIA daily changes were in excess of plus or minus one percent. By contrast, during the succeeding expansion, from October 2000 to the last peak on October 2007, only 20 percent of the daily changes were in that range of plus to minus one.

Since then, to today, 45 percent of the S&P500 daily changes were in the plus one to minus one percent limit, as were 39 percent of the DJIA closes – clearly sharing the characteristics of the earlier, falling prices period.

The same conclusion holds for the NASDAQ: 53 percent of its recent closes were in the plus one to minus one percent range. This number is closer to the 70 percent experience of the 2000 downturn than the recent expansion, in which only 40 percent of the daily changes were within those limits.

DJIA .34 percent
NASDAQ .55 percent
S&P500 .53 percent

This entry was posted on Wednesday, March 5th, 2008 at 12 052008000000Wed, 05 Mar 2008 17:01:47 +0000 and is filed under Market Report. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.