January 27, 2009
The NASDAQ and the S&P500 closed up for the third straight day, while the DJIA extended its positive streak from one to two. This combination has occurred only 22 times since 1950. Five of these days were in the four years when prices fell between January and December.
Each index behaved quite differently on the following day. The NASDAQ went higher 14 times and fell 8 times. The S&P500 had an even number of plus and minus days, whereas the DJIA increased just nine times and decreased on thirteen days,
However, in the four years when prices fell, all the indices managed just one positive follow-up while falling four times. (There were two such closes in the negative year 2002.)
The record for the 16 positive years, when prices at the end of December were higher than at the beginning of January, is significantly different. All three indices moved higher 12 times and declined just four times.
January tends to be a telltale month; often considered to indicate what will happen to prices during the rest of the year. Bearing in mind the S&P500, note that the January median decline was -2.75 percent in the 16 negative years since 1950. As of this moment, with that average falling from 903.25 on December 31, 2008 to todays 845.71, the rate of change so far is -6.4 percent.
DJIA .72 percent
NASDAQ 1.04 percent
S&P500 1.09 percent