February 2, 2009
At the close, the indices were a mixed bag. The NASDAQ was up 1.22 percent, while the other two declined. The S&P500 fell just -.08 percent and the DJIA lost -.80 percent. Only 49 days share such a pattern.
With seven of these occurring since January 2000, and two last year, their next trading days had quite strong results. All the indices posted gains on five of the following days. Moreover, all increases bettered one percent, with one moving more than three percent higher.
Following up on the impact of January closes on results for the full year, discussed in last Fridays post, here are the possible changes projected to December 31, 2009, based on a simplistic technique that, in itself, explained less than 35 percent of the variation in year end results.
The forecast changes for all of 2009 run from -14 percent for the NASDAQ to -19 percent for the S&P500; and with last months losses near two percent, the projected declines between now and the end of the year are somewhat modified. The remaining correction between now and December 31 for the S&P500 is -11 percent, -8.2 percent for the NASDAQ and -7.8 percent for the DJIA.
This projection must be viewed with extreme caution, based as it is, on a raw and simplistic model, which fails to explain even 40 percent of year-end results of the past 57 years.
DJIA -.80 percent
NASDAQ 1.22 percent
S&P500 -.08 percent