January 16, 2009
Until today, the market failed to achieve two positive sessions in a row. (ItÂ’s correct, of course, to interject that on the first day of the year, the indices moved higher after two straight up closes at the end of last year.) While last year saw 22 separate strings of double positive days, for 8.7 percent of total closes, these accounted for only 7.2 percent between 2000 and 2007.
Yet, this comparison is misleading, because over a longer time span, the frequency of two positive days [double positives] in a row has increased. This is so, whether values and prices rose or fell during the year. The table below separates the total number of double positive closes by positive and negative years. These data show that the frequency of double positive closes is higher in years of rising prices than in periods when the December 31 price is smaller than the year before.
Whereas this is as expected, the fact that the percentage of double positives is almost identical, at near three percent, in rising years and in falling years is a not.
Moreover, in comparing the 1950-1999 results with those since 2000, the ratio of double positives is higher in the latter years than in earlier ones. In addition, note that this feature holds in bad years as well as in good ones.
DJIA .84 percent
NASDAQ 1.16 percent
S&P500 .76 percent