September 18, 2008
Prices reversed themselves, resulting in a strong surge that recovered almost all of the previous days losses. The NASDAQ and the S&P500 gained more than four percent, after experiencing declines of similar proportions yesterday.
As for the DJIA, it did almost as well; and just as it had the smallest gain today, it also experienced the smallest drop yesterday.
There are just ten sequences of these four percent gains following a four percent loss for the NASDAQ, while the S&P500 has only three.
The DJIA record shows five days, with gains larger than 3.86 percent following a four percent loss. Four of these pairs coincide with the bottoms of price cycles, while only one occurred when this index topped out, in 1989. The pattern for the S&P500, also shows that its three reversals all occurred when the index revered direction, from falling to rising prices.
While the NASDAQ typically shares this feature before its sharp and lengthy correction in 2000, during this latter period, these paired decline/recovery days came while short term upward reversals interrupted the long decline.
(Posted at 10:30 AM, September 19, delay resulting from data glitch.)
DJIA 3.86 percent
NASDAQ 4.76 percent
S&P500 4.33 percent