December 16, 2010 Price Recovery Exceeds Yesterday’s Loss

Gaining .36 percent, the DJIA has now changed direction six times in as many days. The NASDAQ, up .77 percent, also reversed yesterday’s loss, recording its fourth reversal in the last four days. The quite different S&P500 record, posted a .62 percent advance after Wednesday’s loss; but that index had been up for six straight sessions before then.

The past has seen 503 days with this pattern, with 223 coming after December 1999. The outlook for the next day, based on this record, implies continuation of the up/down market. While gains did outnumber losses for the DJIA and the NASDAQ, the margin was no larger than 9, the S&P500’s 112 losses exceeded its 111 gains.

Furthermore, the incidence of this pattern does not match the two periods of bull and bear markets since 2000. In consequence, therefore, today’s commentaries parallel those of the day before.

 

DJIA                      .36 percent

NASDAQ              .77 percent

S&P500                  .62 percent

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