USMarketView

August 29, 2008

Today was a replay of Monday, with the indices sustaining declines as high as -1.83 percent for the NASDAQ. The S&P500’s loss was limited to -1.37 percent; that was just a bit better than the DJIA’s -1.46 percent.

The relative magnitude of the sell off was substantial: Only 26 other days had steeper losses this year.

This Friday saw the third weekly loss in a row for the DJIA; it was the second straight decline for the NASDAQ and the S&P500. It seems that the recovery, started in the week ended July 18, has stalled out; and while the NASDAQ’s gains were the largest over this period, this index has also dropped substantially more, percentage wise, than the DJIA and the S&P500.

As for the opening after the holiday next week, looking at the past patterns after a single day’s decline, the S&P500 moved higher 17 times and fell only 9 times. The DJIA has one additional negative day, while the NASDAQ has a record of an even number of increases and decreases.

For the Record:

Comparing today’s declines for all three averages with their history, as posted yesterday, indicates that the past was not a good predictor, since the earlier results came in with a 3:1 preponderance of gains over losses.

DJIA -1.46 percent

NASDAQ… -1.83 percent

S&P500 -1.37 percent

August 28, 2008

It was the best day since August 8! Today’s increases, ranging from 1.22 percent for the NASDAQ to 1.85 percent for the DJIA, were the largest in 14 trading days.

In fact, only nine other instances exist since 1950, when all three indices together, on the same day, added percentage increases in these amounts. As for this decade, there are only two days.

Considering these results in terms of daily trading patterns, we now have three straight upticks for the DJIA and the S&P500, following their losses on Monday. In short, this is a +3/-1 run.

The NASDAQ configuration with today’s advance, after moving ahead yesterday, becomes +2/-2.

This scheme has occurred 6 times since 1950 but only 4 times in this century. Three accompanied the 2003 to 2006 upsurge, while one, on March 21, 2000, even while prices were rising, took place just before that downturn.

Turning to the next day, since 2000, all these indices moved higher three times and fell on only one day.

For the Record:
Comparing today’s gains for all three averages with their history, as posted yesterday, indicates that their performance exceeds the average number of gains achieved in the past.

DJIA 1.85 percent

NASDAQ… 1.22 percent

S&P500 1.48 percent

August 27, 2008

With the NASDAQ posting its first up tick of the week, and the DJIA and the S&P500 moving higher for the second day in a row, it was a good day for those expecting higher prices. Nevertheless, as of today, Wednesday, none of the indices has reached the closes posted on last Friday.

Analyzing the pattern of closes so far this week, the NASDAQ has a +1/-2 record, while the DJIA and the S&P500 stand at +2/-1

Restating these positions, today’s positive NASDAQ close has been added to the downticks of Tuesday and Monday. The DJIA and the S&P500 today posted their second successive up day, while their account must also count Monday’s negative change.

Fifteen such patterns exist since 2000, and today’s result makes it sixteen in total. Plotting the S&P500 over the past eight years, and locating the previous 15 events on the diagram below, indicates that usually this pattern occurs when the market is moving higher.

As for the following day, the DJIA had 11 losses and only 4 gains. However, both the NASDAQ and the S&P500 scored eight gains and had only seven losses.

For the Record:

Comparing today’s gains for all three averages with their history, as posted yesterday, indicates that their performance exceeds the average number of gains achieved in the past.

DJIA .79 percent

NASDAQ… .81 percent

S&P500 .80 percent

August 25 and 26, 2008

There was not much change on Tuesday after Monday’s drop of near minus two percent. As a result, the indices now are a bit lower than their final trades last Thursday.

The closing pattern of the NASDAQ now stands at -2/+1 whereas the DJIA and the S&P500 have a +1/-1 record.

In words, the NASDAQ’s last two closes were negative while it gained –some 1.44 percent- on Friday. The other two indices closed higher today after falling on Monday.

There have been eight such repeats between January 2000 and today. Four of these occurred in declining markets while the other four took place between 2003 and 2006, when prices were rising.

In the past, the NASDAQ went up four times on the next day and declined the other three days. The S&P500 had three increases while the DJIA rose just two times.

August 26, 2008

DJIA .23 percent

NASDAQ… -.15 percent

S&P500 .37 percent

August 22, 2008

With all indices gaining more than one percent, the market step was the largest since August 5, when they spurted nearly three percent. It was the third straight positive close for the DJIA and the S&P500, while the NASDAQ has been fluctuating up and down since Tuesday.

It is only the 13^th occasion for this pattern — +3/-2 for the DJIA and the S&P500, and +1/-1 for the NASDAQ– since January 2000. In the past, four of these came while prices were increasing; three were close to tops and four appeared during declines.

As for the next day, in the past when these 12 closes occurred, eight were positive for the NASDAQ, five for the DJIA, and only four for the S&P500.

It was a negative week for all three indices and the first such decline for the NASDAQ in five weeks.

DJIA 1.73 percent

NASDAQ… 1.44 percent

S&P500 1.13 percent

August 21, 2008

Today was a close repeat of last Friday, with the DJIA and the S&P500 gaining fractions while the NASDAQ was off .36 percent. This is the 25^th repeat of this pattern: the NASDAQ having a -1/+2 record, whereas the other two indices have a +2/-2 past.

On the day following such closes, both the NASDAQ and the S&P500 had about the same number of up days as losing days. The DJIA, however, has a preponderance of positive closes: 14 upticks compared to nine next day declines.

However, this past Monday -the ‘next day’ of the above sequence- not only did all three indices turn negative, but their changes were in the -1.45 percent to -1.55 percent. Moreover, those were the deepest losses for these indices since July 2008.

DJIA .11 percent

NASDAQ… -.36 percent

S&P500 .25 percent

August 20, 2008

The market finally scored a positive close for the first time this week. It was the first uptick for the NASDAQ since Thursday of last week.

But from the historical perspective, the analysis published over the past two days has not altered. With today’s results, as on Monday and Tuesday, these patterns of closes have occurred mainly when prices were in a long run decline.

As described earlier, this is the seventh repeat, since 2000, of the sequence +1/-3/+1 for the NASDAQ and +1/-2/+2 for the DJIA and the S&P500.

As for the following day, in the past the DJIA and the S&P500 fell four times the next day, increasing only on three days. The NASDAQ had a slightly better record, with only three declines and four increases on the next day.

DJIA .62 percent

NASDAQ… .20 percent

S&P500 .62 percent

August 19, 2008

The NASDAQ fall continued for the third session in a row. The DJIA and the S&P500 followed suit, closing in the red, the second time this week.

As described yesterday, this is the 17^th repeat, since 2000, of the sequence -3/+1 for the NASDAQ and -2/+2 for the DJIA and the S&P500.

Ten of these occurred during the 2000-2002 bear market. There were two each in 2004 and 2005; and although prices were rising, three of these happened just before retreats temporary temporarily interrupted the upturn in values.

As for the following day, in the past the DJIA fell ten times for another day, increasing only on seven days. The S&P500 had one more positive day, a total of eight increases and nine declines. The NASDAQ had the best performance: eight further declines and nine positive closes on the next day.

DJIA -1.14 percent

NASDAQ… -1.35 percent

S&P500 - .93 percent

August 18, 2008

With the NASDAQ dropping -1.45 percent for the second straight session, and the other two indices also losing near -1.5 percent, this was the first time since July 28 that all three lost more than -1.0 percent in a single day.

It was the sixth time since January 2000 for this combination: the NASDAQ having one additional down day than both the DJIA and the S&P500.

The NASDAQ string being -2/+1 while the other two indices have a -1/+2 pattern.

Importantly, three of these days came during the 2000-2002 downturn; one occurred on June 12 of last year, just before the market top, and the other two were on December 14, 2007 and on May 5 of this year, in the current decline.

DJIA -1.55 percent

NASDAQ… -1.45 percent

S&P500 -1.51 percent

August 15, 2008

The week closed with the DJIA and the S&P500 gaining a fraction today, and the NASDAQ off by -.05percent. Whereas the difference of these changes is small, nevertheless, the record reveals 23 such days since 2000, and 79 in all.

On the day following such closes, both the NASDAQ and the S&P500 had about the same number of up days as losing days. The DJIA, however, has a preponderance of positive closes: 14 upticks compared to nine next day declines.

As for the Friday-to-Friday comparison, the DJIA lost -.63 percent from a week ago, but the NASDAQ and the S&P500 gained 1.59 percent and .15 percent respectively.

Today’s positive weekly close for the NASDAQ is its fourth in a row. There are just 12 other occasions since January 2000 when the NASDAQ scored such a steady gain. Moreover, on three of those, prices were declining; on the other nine events, the market was rising.

DJIA .38 percent

NASDAQ… -.05 percent

S&P500 .41 percent