USMarketView

November 6, 2008

Prices took another beating today, as the S&P500 off by -5.03 percent, repeated the two day, significant drop sequence at the end of October. While that earlier run cost the S&P500 more than minus three percent in two consecutive sessions, the numbers this week are worse:- 5.03 percent today on top of yesterday’s -5.27 percent.

The same double day pasting hit the DJIA and the NASDAQ, with today’s minus four percent closes added to yesterday’s minus five percents.

Huge price swings dominate the trading since the beginning of October. The NASDAQ changes range from a low of minus 8.5 percent to a high of 9.6 percent. Such wide fluctuations typify steep bear markets. In 2002, when the NASDAQ lost minus 23 percent, the daily change rate ran from minus four percent to plus eight percent. However, in 2004, with prices increasing 24 percent, the daily range was a narrow minus four to plus five percent.

The distribution of daily price changes approaches a normal curve in good years, with prices rising or falling in a symmetrical, by size, fashion. In contrast, falling markets’ distributions look like a rectangle because the number of large and small changes seem identical.

DJIA -4.85 percent

NASDAQ… -4.34 percent

S&P500 -5.03 percent

This entry was posted on Thursday, November 6th, 2008 at 12 062008000000Thu, 06 Nov 2008 18:05:26 +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.