September 25, 2008
The first advance of the week ended with the S&P500 up 2.04 percent and a 1.82 percent increase in the DJIA. The NASDAQ, which had already moved .11 percent higher yesterday, added another 1.43 percent today. This is the 14th repeat of this combination this year, and the 74th since 2000.
Yet a caution is necessary: most, if not all, of the S&P500 gains in excess of two percent occurred when prices were falling, during the 2001-2002 contraction and since the end of 2007. This pattern holds also for the DJIA; large gains are associated with long term declines. The NASDAQ situation is different. While many of these 1.43 percent and over days occurred when the trend was down, they also came when the market was rising, between 2003 and 2007.
In the past, the day following these upward moves saw the S&P500 and the DJIA post falling prices almost as often as increases. The NASDAQ, however, had more decreases 49 in all, contrasted to only 38 further gains.
For the Record.
Todays strong results are more positive than the forecast based on the history since 2000. Both the DJIA and the S&P500 had more decreases than increases, and only the NASDAQ had more positive, than negative days.
DJIA 1.82 percent
NASDAQ 1.43 percent
S&P500 2.04 percent