Prices plunged and the DJIA was denied another, seventh, positive day in a row. Instead it lost -1.90 percent; yet the S&P500 and the NASDAQ fared even worse. The S&P500 suffered a -2.34 percent drop while the NASDAQ fell -2.04 percent. All told it was the worst trading day since February 4th, 56 trading days ago.
Comparing todays loss separately to the ranked declines of each index, the S&P500, again, fared the worst the -2.34 percent decline is the 202nd deepest in its history, going back to 1950. The DJIA had 355 worse closes while the NASDAQ, ranked at number 470 from the bottom, had the best relative performance of the three.Yet this descent -unwelcome, of course- need not signify a downward spiral in the making.
Indeed, todays pattern of two straight declines for the NASDAQ and the S&P500, combined with the first negative DJIA close in seven days, has taken place 12 previous times since January 2000. Moreover, the diagram shows that a trend of rising prices followed 10 times. And, of the 50 occasions since 1970, 35 preceded bull market conditions.Consequently, todays drastic downgrades need not signal a future end to rising prices. Indeed, it fails to indicate that a spontaneous revaluation of this markets potential is imminent.
DJIA - 1.90 percent NASDAQ - 2.04 percent S&P500 - 2.34 percent