Prices dropped further than Thursdays gain, with the NASDAQ falling 2.02 percent, the S&P500 sinking 1.67 percent and the DJIA off -1.42 percent. The NASDAQ dip ranks as the 477th worst of the more than 4,300 declines in its history; similarly the loss of the S&P500 is its 512th severest, going back to 1950. The DJIAs smaller loss nevertheless placed it at number 735 from the bottom.
Even though the focus of USMarketWatch is to seek underlying patterns from history, the news that government sees activities of surely the highest respected financial firm as unlawful, cannot be dismissed, not taken into account. This surely has more impact on the fundamental core of expectations than an unforeseen uptick in the price level or the unemployment rate.
Nevertheless, evaluating todays closing configuration reveals that a down day after two successive gains has occurred just 76 other times since January 2000. Further, that they were more common in the 2007/2009 decline than in the previous and the following recoveries.
Yesterdays projection, tilted significantly to a further increase, obviously was a false call. Yet using the same technique, based on the record, results in the conjecture of a positive close on Monday. In the past, though more positives characterize the follow-up sessions, the actual ratio of 57 percent gains to 43 percent losses fails to provide a robust trust in the projection.
DJIA - 1.42 percent NASDAQ - 2.02 percent S&P500 - 1.67 percent