March 30, 2009
Todays decline, the second in two trading days trimmed values by -3.48 percent for the S&P500, -3.27 percent for the DJIA and -2.81 percent for the NASDAQ. These two losses in a row follow the two straight gains of last Wednesday and Thursday.
This sequence of -2/+2 trading days is quite rare, with only seven such occurrences overall, and none before the middle of 1986. The first two, in 1986 and 1991, marked the tops of periods of growth. Yet prices did not continue to decline; instead, they marked a pause, after which values continued to increase.
However, the following three occurrences are the focus of this analysis, because the first one coincides with the bottom of the 2000-2003 bear market. The diagram below indicates this very clearly. In addition, the next two incidents designate merely short respites from the ongoing bull market that did not top out until October 2007.
DJIA - 3.27 percent
NASDAQ -2.81 percent
S&P500 -3.48 percent