Friday the 13th left the market down for the fourth straight day a close so rare that it became only the 13th since January 2000 and the 47th going back to 1950. Of course this negative run renews the pessimism that accompanies a weak recovery featuring substantial long term unemployment. Yet a glance at the following diagram reveals that many, if not most, four day declines accompany, even precede a strong improvement in market prices.
Four of the runs took place at the bottom of the 2003 decline. Another hit in March 2009, just as the 2007 decline ended. Moreover this sequence shows up also during short term reversals in the rise of prices between 1993 and the top of 2000.Finally, except for the one happening after the October 2007 top, none of these four declines in a row appear before a market decline.Hence it would be premature to interpret the current negative run as signaling a market top with a further erosion of values in the near future.
For the record, note that the deepest drop on record more than - 20 percent in one day- also struck on the fourth straight decline in October 1987.
DJIA -.16 percent NASDAQ -.77 percent S&P500 -.40 percent