May 12, 2009
The positive side had the DJIA gain .60 percent; the negative feature had the NASDAQ drop -.88 percent; the S&P500 was in-between, losing -.08 percent. Yesterdays projection, based on the wide distribution of its negative changes, called for a repeat of the past: small declines in the DJIA and the S&P500, and a substantial drop for the NASDAQ.
Todays closes could be interpreted as sustaining that expectation. At least in the sense that the NASDAQ lost nearly a percent, while one of the other two indices had only a small decline. The DJIA gain, however, of more than a half a percent, does not fit that pattern.
The future, based on todays pattern of closes in the past, does not look bright. The S&P500 shows 11 declines and 7 gains for the following day. The NASDAQ record is somewhat brighter, with only 10 losing days and 8 gainers, while the DJIA has an even number of declines and increases.
Note that the up and-then-down pattern still dominates the action. The DJIA posted its sixth change in direction in as many days, whereas the NASDAQ and the S&P500 varied their pattern by falling for a second straight day. Yet with the S&P500 losing a mere .08 percent, .its performance today fails to qualify as a significant change in direction.
Todays pattern the DJIA rising and the other indices falling for the second day in a row- has occurred 36 times since 1950, and 14 times in this century. Of note is the fact that the DJIA and the S&P500 posted fractional losses over this entire period, while the NASDAQ dropped more than one percent 14 times. It posted two declines in excess of minus three percent.
DJIA .60 percent
NASDAQ -.88 percent
S&P500 -.08 percent