USMarketView

February 23, 2009

Losses went from  -3.41 percent for the DJIA to  -3.71 percent for the NASDAQ as the market fell for the sixth day in a row.  October 9, 2008 was the last time we faced this long a slide. But then, the markdowns were much smaller –from just -.83 percent for the NASDAQ to minus two percent for the DJIA.  Indeed, none of the five other six day negative runs generated a loss anywhere near as deep as today.

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    

This entry was posted on Monday, February 23rd, 2009 at 12 062009000000Mon, 23 Feb 2009 18:50:07 +0000 and is filed under Market Report. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.