Prices moved higher for the second day in a row, but the increases were much smaller. In fact they came to less than half of Thursdays robust advance. The NASDAQ added 1.19 percent whereas the S&P500 was limited to .44 percent and the DJIA to .38 percent. Focusing attention on this performance gap because it could provide insights of what prices will do in the future, note that importance results from the size of the disparities.
Disparities in the daily changes occur often but the magnitude of todays disproportion is unusual. Indeed, only 19 other closes since 2000 have, or exceed, todays proportions. The diagram of the S&P500 identifies these with a triangle; its vertical lines separate the bull and the bear phases.
Six of these incidents happened during the 741 days of decline between 2000 and 2003; that ratio is .81 percent of all trading days. In the following bull phase, 7 of the 1154 trading days, or .61 percent, experienced a disparity this large. The next phase, between 2007 and 2009, saw 6 such happenings representing 1.69 percent of those 355 trading days.
Accordingly, associating this gap with periods of falling prices is not unreasonable. Yet these differences could be considered minor and therefore unimportant. Nevertheless, during the present period of large daily up then down changes, this variant from the ordinary patterns of relative index performance, could provide an insight into the markets future direction.
DJIA .38 percent NASDAQ 1.12 percent S&P500 .44 percent