USMarketView

July 1, 2008

After being in the red for most of the day, the first day of the second half of 2008 ended with all three indices posting advances. They were small, but they were positive, with the NASDAQ closing higher for the first time in four days.

With the market falling at the beginning of the year, then making a strong recovery, only to face losses and decline from where it started, it is difficult to produce evidence that suggests where it may be heading now.

One of the characteristics of the current cycle is the large number of days when results, while positive, were in changes less than one half of one percent. Days like today, for example.

Consider the following time series, depicting closes of the S&P500 since 2000, in that range. Clearly, there are far fewer of these changes when the market is falling –100 closes in 789 days between zero and one half percent- than when it moves higher -368 over 1,144 days.

Those ratios of small, positive closes are 12.7 percent of the days in a falling market and 32.2 percent when prices are surging.

Seems counter intuitive but there it is. As for the current situation, there is little that this comparison contributes to judging the future. So far in the 197 days since prices peaked last fall, 20 percent of the closes were positive but less than one half percent. That ratio is just about half way between the results for falling and rising market conditions!

DJIA .28 percent

NASDAQ .52 percent

S&P500 .39 percent

This entry was posted on Tuesday, July 1st, 2008 at 12 062008000000Tue, 01 Jul 2008 18:14:32 +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.