August 6, 2010
Data Problems Cancelled August 4 and August 5 Posts
Prices fell for the second day in a row: the S&P500 lost -.37 percent and both the DJIA and the NASDAQ dropped -.20 percent. The pattern for the past four days, -2/+1/-1, is the 47th repeat since 1950 and the 25th since January 2000. The diagram of the S&P500 illustrates this record with a triangle marking these dates.
While no significant differences exist in their frequency over good and bad times, the average loss on these dates does vary between rising and falling markets. Looking at these, in the bottom line of numbers underneath the graph, reveals deeper average losses when prices are falling.
During the ten incidents of the 2003/2007 bull market, for example, the average percentage change for these days is minus .80 percent, while the previous decline shows a -1.11 percent average. Similarly, this present recovery period has a -1.27 percent daily decline, which is not as deep as the -1.96 percent average of the 2007/2009 decline.
Two other features deserve attention. Today marks the 354th session since prices hit bottom on March 3, 2009; a period equal in length to the 2007/2009 decline.
Furthermore, the frequency count of todays pattern -46 since 1950- has returned to larger numbers. Contrary to the recent experiences of just one, two or three other such runs in the past. Accordingly, they allow greater reliance for projections based on past results.
DJIA -.20 percent
NASDAQ -.20 percent
S&P500 -.37 percent