Archive for December, 2010

December 16, 2010 Price Recovery Exceeds Yesterday’s Loss

Thursday, December 16th, 2010

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

December 15, 2010 A Down Day

Wednesday, December 15th, 2010

  

Prices of all three indices lost ground today – that’s a first, since December 1 at the end of each day, at least one index closed in the positive column. Further, the DJIA and the NASDAQ now have a series of up and then down days.

Those events, when all three indices move up and then down in lockstep, have not been uncommon over the years: today’s is the 193rd since the start of 2000.

As for projecting this pattern, to see if it favors rising or falling price trends, these runs occur almost evenly in upturns and downturns.

The same conclusion applies to forecasting the following day. Although the record shows that in the next session 100 gains outnumber the 92 declines, these again, are distributed almost evenly over the two trends.

 

DJIA               - .17 percent

NASDAQ       - .40  percent

S&P500           – .17 percent

December 14, 2010 S&P500 Scores Sixth Successive Gain

Tuesday, December 14th, 2010

A flurry of excitement greeted the S&P500’s  .42 percent increase, as it continued the run of positives started a week ago today. It was the fourth such streak this year, and the 21st since January 2000.

The NASDAQ featured a similar six run, just a few days ago. (Indeed, that series extended for two additional days.) In fact, the NASDASQ index almost doubled the S&P500 frequency, with seven so far this year, and 28 over the past 11 years.

Today’s diagram features those six increases in a row, with the NASDAQ days in maroon and the S&P500 in green. Almost all happened while prices were on the rise. Thus the cluster of green and maroon dots occurs between 2003 and 2007, as well in the current upswing that started in 2009.

In view of that past bunching in good times, it seems plausible to expect a further continuation of the ongoing increase in prices.

DJIA                      .42 percent

NASDAQ             .11 percent

S&P500                 .09 percent

12142010-six-ups-in-a-row.png

Tuesday, December 14th, 2010

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December 13, 2010 An Unusual Pattern

Tuesday, December 14th, 2010


 

Today’s -.48 percent decline of the NASDAQ, combined with the DJIA’s ongoing  positive-then-negative days, and the no change close of the S&P500, has not occurred before.  History reveals that an almost similar pattern—in which the S&P500 posted small gains—did happen three times. Two of these go back to the 1980’s while the last one, in February 2005, preceded an approaching top.

Prices then fell slightly, before recovering and moving higher, beyond the earlier peak. However, shortly thereafter, the market experienced a significant correction; that lasted for almost three months. Thereafter, in May 2005, values returned to their earlier positive trend that continued till October 2007.

While USMaketView presents this information, one previous close fails to qualify as a plausible basis for projections.   

 

DJIA                      .16 percent

NASDAQ            -.48 percent

S&P500                  .00 percent

December 10, 2010 NASDAQ Recovery Accelerates

Saturday, December 11th, 2010

Adding .80 percent, the NASDAQ scored its eighth’s consecutive advance today. This streak, only the six in the past 11 years, moreover, is its fourth in 2010.  Looking ahead, the record shows just three nine-days-in-a-row since 2000, with three of those occurring this year.This index now has returned to 93.3 percent of its October 2007 high of 2803.91, and betters the previous recovery high of 92 percent, reached earlier this year, in April.    

Furthermore, while the DJIA and the S&P500 also reached post October 2007 highs, their improvement rate is lower, and their disadvantage relative to the NASDAQ is getting worse.

The diagram illustrates the recapture rate of these indices so far this year. Whereas the S&P500, now at 78.8 percent of its 2007 high, had achieved 86 percent parity with the NASDAQ in April, today that ratio has fallen to 84.5 percent.

Similarly, although the DJIA improvement rose from April’s 79.1 percent to today’s 80.3 percent of the October 2007 high, its equivalence with the NASDAQ has declined, from 88 percent in April to 86 percent today.

Projecting the relative future of these three improving indices requires estimating whether the gap will continue to accelerate or whether the DJIA and the S&P500 will be able to close this, so far, growing imparity.  

DJIA                      .35 percent

NASDAQ              .80 percent

S&P500                  .60 percent

12102010-nasdaq-recovery-beats-others.png

December 9, 2010 Sorry — Computer Hang Up

Thursday, December 9th, 2010

No Blog today.

December 8, 2010 ‘Not Much Change Today’ and Price Appreciation

Wednesday, December 8th, 2010


The three indices continued their recent repetitions of minor changes; their pattern now stands at six advances in a row for the NASDAQ, two for the S&P500 and just one for the DJIA.  Just two other sessions have this record, and both go back to the 1990’s. Clearly, these provide no insight on our future, given their rarity and their age.

Instead, we focus on the relationship between the size of daily changes and the overall direction of the market. First, note that the variance of daily changes systematically with the direction of prices. Furthermore, considering these pairings over the past ten years, reveals that large daily changes occur mostly during periods of declining prices. On the other hand, when prices are rising, the daily changes of these indices not only are small, but they are significantly smaller than the price variations during declines.

Thus, turning to the future, it seems reasonable to expect that the current spate of small changes indicates a trend of rising prices.

 

DJIA                          .12 percent

NASDAQ                 .41 percent

S&P500                     .37 percent

 

December 7, 2010 Another ‘Not Much Change Today’

Tuesday, December 7th, 2010


 

Prices changes were even smaller than the day before. Though the market started higher in anticipation of the tax compromise, by day’s end, the DJIA lost  -.02 percent; the NASDAQ though stayed in the positives at plus .14 percent, while the S&P500 gained .05 percent.

This pattern occurred merely three times before, in the distant past of 1976, 1991 and 1995. Therefore, this history fails to provide meaningful information for what might happen at the end of 2010.

One factor stands out – recently S&P500 prices have oscillated in the range of 1193 – 1223, since the beginning of November. Whereas those 30 points do amount to 2.5 percent, that interval consists of many different up and down phases. These changes make the diagram of closing prices near horizontal, and considerably less volatile than during the previous 12 months.

Given the market’s record of sizable up and down moves, the current stability suggest a breakout in the near term – and that could be in either direction.

 

 

DJIA                        -.02 percent

NASDAQ                 .14 percent

S&P500                     .05 percent

December 6, 2010 Not Much Change

Monday, December 6th, 2010

Prices remained relatively stable all day and at th end, the NASDAQ had moved higher, continuing its streak for the fourth day. The DJIA and the S&P500, though, lost fractions, thus closing down for the first time in four days.

The resulting pattern  -the NASDAQ’s  +5 and the -1 of the other two averages- is rare. Today’s only the 5th in the past ten years, and 75 others before 2000.

In the past, declines  ruled  the following day, with four negatives offset by just one up day.

DJIA                        -.17 percent

NASDAQ                   .13 percent

S&P500                  -.13 percent