February 23, 2009
Moreover on the following day in 2008, prices dropped even further, ranging from -5.5 percent for the NASDAQ to -7.6 percent for the S&P500. Yet, in the four earlier six-day declines, between 1978 and 1991, the regressions were much shallower, and prices even rose twice on the following days.
There could be some good news for the future though, if the e the DJIA repeats the price path of those four earlier days. Consider the graph below, which shows the DJIA closing prices between 1977 and 1992. The vertical lines indicate these four earlier six-day negative runs. Clearly, the erosion of values slowed, and prices even increased in the following days, after the market suffered these strings of losses.
DJIA -3.41 percent
NASDAQ -3.71 percent
S&P500 -3.47 percent