USMarketView

June 30, 2008

Prices fell as the hour grew later, and the NASDAQ went into negative territory, closing the day down by -.98 percent. The DJIA and the S&P500, however managed to edge up a bit, gaining .03 percent, and .13 percent, respectively.

Yet the NASDAQ’s performance for the second quarter, which ended today, was positive, increasing .61 percent over its March 31 close. If this is not a strong showing, it nevertheless is far superior to the DJIA which ended the quarter some -7.44 percent below 2008’s first quarter. The S&P500 fared somewhat better, losing -3.22 percent for the quarter.

Both the DJIA and the S&P500 have scored five advances to four losses, between March 31 and June 30 in the 21^st century. The NASDAQ, basically because of its second quarter gain, has six advances to three declines.

DJIA .03 percent

NASDAQ -.98 percent

S&P500 .13 percent

June 27, 2008

It was another bad week, differing only in that it was Thursday, instead of the Friday before, that prices tumbled from the opening bell. Today, however, the losses were moderate, by the end of the day the NASDAQ was off -.25 percent, the S&P500 by -.37 percent, while the DJIA was the worst performer, losing -.93 percent.

The DJIA dropped -4.19 percent this week, its fourth loss in the past six weeks. While the size of the loss drew much attention, the more important reality is that of frequency: this is the fourth time this year that the index plunged more than minus four percent in a week. Indeed, the DJIA lost -4.23 percent in the opening week of 2008.

Despite the market recovery since March, prices are now in regression to their earlier level this year. In the past six weeks, the NASDAQ and the S&P500 have been down five times. And those losses are far steeper than the solitary positive gain.

The appropriate focus is not just on the size of the losses, but also on their frequency. The S&P500 lost more than minus four percent per week some 21 times since January 2000, yet only two of these occurred during the long upswing from 2003 that ended only last year. The others populated the decline of 2001.

The DJIA and the NASDAQ have the same profile: its not that four weekly losses in a row are not seen in a rising market; it’s their preponderance in a bear market that requires our attention.

DJIA -.93 percent

NASDAQ -.25 percent

S&P500 -37 percent

Posted June 29, 10:00 AM

June 26, 2008

Today is only the ninth time since 2000 that the NASDAQ and DJIA lost more than three percent, joined by the S&P500, falling almost as much at -2.94 percent. It’s this togetherness that’s unique, for the NASDAQ, by itself, had an even 100 days of losses exceeding minus three percent in the last eight years.

The graph below indicates the levels of each of the indices on days that the NASDAQ.declines more than three percent, regardless of the performance of the other two. It’s easy to see that all but nine of these accompanied the last decline, in 2000 to 2002.

Today, for the fourth time since last October, markets experienced this same configuration.

Looking at the past, since January 2000, of the nine days following such closes, all the indices recorded only two losses, managing to recover seven times. Moreover, drops on the following day have not occurred since 2001.

DJIA -3.03 percent

NASDAQ -3.33 percent

S&P500 -2.94 percent

June 25, 2008

Prices ended higher for the first time since last Friday, but the performance of the NASDAQ exceeded the other two indices by a substantial margin.

While the NASDAQ moved up by 1.39 percent, the DJIA gained a mere .04 percent, whereas the S&P500 increased by .59 percent. That is, the NASDAQ gain exceeds the DJIA by some 34 times! Such a number has occurred just eight times, ever. Yet today it happened for the third time this year.

While the S&P had a .59 percent increase today, nevertheless the NASDAQ gain is 2.36 greater. It’s also the third time for such a disparity in 2008.

March 10 marks the most recent bottom; since then the NASDAQ has increased 10.7 percent. The S&P500 grew just .38 percent while the DJIA edged up a mere .6 percent.

Such diversity suggests some thought will be productive to determine the fundamentals explaining this differential performance.

DJIA .04 percent

NASDAQ 1.37 percent

S&P500 .59 percent

June 24, 2008

The NASDAQ now has ten of these strings in 2008, while it was the ninth time for the DJIA to post three straight losses. Up to the beginning of this year, the NASDAQ had 125 of these three losses in a row closes.since January 2000. That averages out to 14 plus such runs in each year. On the following, this negative streak was extended to four straight losses as often as the next day ended with an up close.

The DJIA has a slightly more positive history, with only 118 three losses in a row closes since January 2000. Moreover, it turned up 67 times and fell for the fourth straight day only on 51 days.

The S&P500 has been following a slightly different pattern, with a down day today, a positive close on Monday, after a minus -1.85 percent loss last Friday.

As noted yesterday, the NASDAQ performance is in line with its recent pattern of continuing to post deeper losses than the other two indices.

DJIA -.29 percent

NASDAQ -.73 percent

S&P500 -.28 percent

June 23, 2008

The market started higher, then declined, rose again and then fell, closing pretty much where it started, except for the NASDAQ which lost -.85 percent today. Meanwhile the S&P500 picked up .01 percent while the DJIA declined -.33 points, an amount that fails to round up to even .01 percent.

A similar day –let alone an identical one- is hard to find, going back all the way to 1950. Indeed, there are just 115 closes in which the NASDAQ rose while the other two indices declined, 19 of which occurred since January 2000, and three so far this year.

Considering the price activity since April 25, reveals that the NASDAQ rose 2.2 percent from that date, while the S&P500 fell -3.4 percent and the DJIA dropped -5.7 percent in the same period. So perhaps an experience such as today’s may be due to market pressures attempting to bring the gains of these indices into equivalent valuation.

DJIA -.00 percent
NASDAQ -.85 percent
S&P500 .01 percent

June 20, 2008

It was bad from the opening bell, and by the end of the day the NASDAQ was off -2.27 percent, while the DJIA and the S&P500 lost around -1.85 percent.

There have been only 87 days as bad, or worse, than today since January 2000. But it is the 10^th time this year. By contrast, in 2007, there were just ten all year, and only two occurring before the middle of August.

Only seven such days hit the market between 2003 and 2006. But in the years of market decline, as in 2002, there were 24; yet, to make a comparison with the present, that year had only six such losses before July.

For the week, the DJIA suffered the sharpest decline, slicing -3.78 percent from last Friday, with the S&P500 close behind, at -3.10 percent. The NASDAQ, on the other hand, declined just -1.97 percent.

A point of interest is the divergence of weekly changes of these indices. The NASDAQ had far smaller losses not just this week, but on four other Fridays in the past ten weeks. This is true also for four positive weeks: the NASDAQ performed much better than the DJIA and the S&P500 in eight of the past ten weeks.

DJIA -1.83 percent

NASDAQ -2.27 percent

S&P500 -1.85 percent

June 19, 2008

Today the NASDAQ index shot up 1.33 percent, and while the DJIA and the S&P500 moved higher, their gains were limited to .28 percent and .37 percent, respectively. Such disparate performance, that is the NASDAQ soaring higher by about four times the rate of the other two indices, happened just three times before 2000, and five times in this century. One of these, the last one, occurred on April 10 of this year.

In the past, the day after such gains, saw almost an even number of increases and decreases. However, the losses were substantial, whereas the gains were minimal. For example, on April 11, 2008, each of the three indices lost about two percent.

As for the recent pattern of each individual index separately, that is, isolating their performance* from the others in the past, the NASDAQ has a record of ten increases and no declines on the following day.

The S&P500 had an equal number of losses and gains, six of each since the turn of the century. The DJIA, with 16 such closes, had 12 losses and only four gains on the next day.

DJIA .28 percent

NASDAQ 1.33 percent

S&P500 .37 percent

*The recent daily pattern of each index is

DJIA – today’s positive, after three negative days,after two positive days.

NASDAQ and the S&P500 – today’s positive, after two

negative days, after three positive days.

June 18, 2008

It was the third straight loss for the DJIA, and the second in a row for the NASDAQ and the S&P500. So far, there have been seven down closes in June; this makes it the eight in the 13 trading days of the month. In May, with 21 days of market activity, the S&P500 fell seven times, while the other two indices declined on ten days.

This combination -two successive declines in both the NASDAQ and the S&P500, while the DJIA scored its third straight loss- has occurred just ten times since January 2000. In this case, the past gives little direction on the future, for five of the following days closed higher, and five closed lower.

Moreover, looking at the actual price trend of these indices, since 2000, it is seen that in five cases this closing pattern occurred when the market was at, or near, a top; and two when prices were at, or near, the bottom of a trend. There are two dates when the trend was down and one when prices were rising.

DJIA -1.08 percent

NASDAQ -1.14 percent

S&P500 -.97 percent

June 17, 2008

This third Tuesday of the month saw all three indices decline, and it was also the third Tuesday in a row on which both the NASDAQ and the S&P500 were in the red. Moreover, today, both these indices registered their first decline after three days of positive closes. It was the second successive losing day for the DJIA.

Earlier, the NASDAQ had four straight losses. There are just three other days, since January 2000, when the index followed such a pattern: a down day, after three up days, which came after four losing days in a row. Two of these occurred in 2005, the other in 2001. The record shows that the next day saw the NASDAQ moving higher on all three occasions..

The S&P500 differs a bit from the above, having six positive closes and four negative ones, on the next trading day.

The DJIA, has now fallen two days in a row, after scoring two successive advances previously. In the past, on the following day, the DJIA had more down closes -17- than advances, of which there were sixteen.

DJIA -.89 percent

NASDAQ -.69 percent

S&P500 -.68 percent