USMarketView

The NASDAQ shot up 1.14 percent, posting the largest gain since October 15, nearly three weeks ago. The other two averages moved ahead similarly, rising .58 percent for the DJIA and .78 percent for the S&P500. These are their best daily rates since October 20, nine trading days in the past.

I welcome today’s relatively Iarge changes; they seem to be a return to more usual daily price fluctuations, unlike the recent mini sized ups and downs.

However, today’s pattern does not belong to the typical. With the DJIA rising for the third straight day, and the S&P500 increasing for the second day, while the NASDAQ posting a gain after yesterday’s loss, yields a +3, +2, and +1 combination. Remarkably only six other days share this pattern, yet we see it for the second time in 2010.

A significant reversal at the end of March, ushered in the major decline of April, and lasted till the current rally began.

Four other occasions, in the 1980′s and 1990′s, also happened just days before deep declines. Yet the market recovered promptly from these reversals, and then returned to the earlier trend of rising prices.

DJIA                                                .58 percent

NASDAQ                                       1.14 percent

S&P500                                         .78 percent

Values moved higher most of the day, but then turned lower. At the close, the NASDAQ lost -.10 percent, whereas the S&P500 rose .09 percent and the DJIA gained only .06 percent. The size of today’s changes is quite similar to results of recent sessions.

Indeed, prices remain quite close to October 18^th . Over the the past two weeks, the DJIA fell from 11143.69 to 11124.62, losing -.17 percent. Similarly, the S&P500 dropped -.03 percent. The NASDAQ moved higher over this period, but gained less than one percent.

This performance lags, and results in smaller gains than, than the median ten day change rate of 2010. Earlier this year, half of the NASDAQ 10 change rates exceeded 1.36 percent, while the other half fell below 1.36 percent. Likewise, the S&P500′s median ten day change of 1.42 percent overpowers the past ten days rate of -.03 percent. The DJIA also reports a median change of 1.33 percent.

Generally, a reasonable relationship between price changes and price levels expects increases to taper down at or before market peaks – and losses to become smaller at troughs. However, in examining the record, so far, we have failed to find a general relationship between these ranges and turning points.

DJIA                          .06 percent

NASDAQ                 -.10 percent

S&P500                   .09 percent