April 6, 2009
Viewing todays result as signaling the end of the rebound would be alarmist. The record shows only a small difference in the number of trading days declining, or falling, after four straight advances. The fifth day has been a gainer 29 times since 1950 and a loser 26 times. While in this century, the ratio of positive to negative days was reversed, with only five moving higher compared to eight reversals.
Yet todays DJIA and NASDAQ losses are not as deep as their average declines over those eight reversals. The DJIA dropped -.53 percent, whereas the mid point of the earlier eight declines is -.84 percent. The NASDAQs loss of -.93 percent is also smaller than the -1.24 percent average. Only the S&P500 fell more today, -.84 percent, compared to its average of -.77 percent.
Since 2000, the score on the following day is six advances to two retreats, with the DJIA posting seven advances. Moreover, while most losses were well below minus a half percent, many of the increases exceeded two percent. (The NASDAQ fell -2.91 percent on its worst close but soared 4.14 percent on its best.)
DJIA -.53 percent
NASDAQ -.93 percent
S&P500 -.84 percent