Unlike their European colleagues, our buyers and sellers neglected the impending defaults of Greece, allowing our equity prices to close on a stabilizing note. While the NASDAQ hovered between the negative and positive till the last few minutes, it closed up by plus .01 percent. The S&P500 gained .65 percent and the DJIA moved .48 percent higher.
Naturally these positive changes relieve yesterdays concerns of an impending major dip. Furthermore, this recovery articulates a further contention of higher prices in the long run because declines deeper than minus two percent for two days in a row are a feature of bear markets. The diagram shows clearly that all but two of these sequences since 1990 occur as the market is reaching its lower limit.
The pattern of closes now stands at one gain after two decreases for the NASDAQ and the S&P500 and at +1 /-1 for the DJIA.
Today is the 15th repeat of this sequence, with 6 taking place since January 2000. In the past, the following day saw the DJIA rise 5 times while the other two indices have a 4:1 gain-to-loss ratio.
DJIA .48 percent NASDAQ .01 percent S&P500 .65 percent