January 15, 2009
Finally, after six negative closes and a drop of nine percent, the DJIA turned up. It was a welcome turnaround, even if the uptick was small, and came only after the index was falling most of the day. The combination of a positive day after six straight declines has occurred only 56 times since 1950, seven of which came after January 2000.
Considering these seven days relative to the rise and fall of the market, it is not clear whether this pattern is associated with periods of increasing or decreasing prices. Three came during 2005-2006, when the trend was up, two in 2000, when the movement was down. Importantly, the other two closes were in 2002 and 2007, just as the mark was about to fall substantially.
Do not overlook another feature of todays activity. That is the 1.49 percent increase of the NASDAQ outdistancing the meager gains of .13 percent by the S&P500 and .15 percent of the DJIA. There is only one other trading day that exhibits this wide disparity: October 24, 2001.
Prices were in an upswing on that date which occurred just shortly after the market halted a substantial decline. However, that rise was soon to stop, as values first stabilized and then continued to decline over the next several months until hitting the bottom at the end of 2002.
DJIA .15 percent
NASDAQ 1.49 percent
S&P500 .13 percent