April 23, 2009
But thats only half the story, for while the DJIA and the S&P500 also moved higher, their direction has changed every day of the last four. Furthermore, NASDAQs gain of .37 percent is negligible and ranks no higher than 3357 of all its closes since 1975. Yet this change is more than twice as large as yesterdays .14 percent. Meanwhile the gains of the other two indices of nearly one percent, were not enough to move them off yesterdays losses.
This pattern -the NASDAQ rising on three successive days while the DJIA and the S&P500 are moving up and down- has happened just 19 times since 1971. Only three occurred since January 2000.
However, by focusing just on todays combination, the frequency rises to 94 overall and to 17 in this century. In considering these last 17 events, it becomes apparent that most transpired while the market was weak. The figure below plots the NASDAQ since 2000. The vertical lines indicate these 17 previous closes. While this diagram yields no firm outlook for the future, nevertheless, this combination came about 12 times when prices were at, or near, a peak.
Todays outcome is consistent with the markets past behavior in similar conditions: the number of positive days was far greater than the negative ones. As for the session following todays pattern, the available history describes 14 up days and only three declines for the NASDAQ. The S&P500 has 11 positive closes and 6 losses, while the DJIAs score is 10 gains and 7 declines.
DJIA .89 percent
NASDAQ .37 percent
S&P500 .99 percent