April 13, 2011 Small Gains End Losing Streak
NASDAQ, up .61 percent, scored the largest gain today, leaving the DJIA and the S&P500 far behind. Their increases were limited to .06 percent and .02 percent. While small, these advances came after four consecutive losing days.
This pattern occurred on only 20 days overall, with the last 10 crossing the tape since the beginning of 2000. Yet the outlook for tomorrow, Thursday, based on this record does not seem favorable, with 6 declines and only 4 increases on the following day.
Shifting the focus from todays pattern to the size of todays changes, as shown in the diagram, we observe the NASDAQs increase of .61 percent, overwhelms the gains of both the DJIA and S&P500. In fact, the NASDAQ change overpowers the S&P500 advance by a factor of 30. Similarly, the DJIA increase is only one-tenth the size of the NASDAQs.
We note that only four previous days share this ratio of gains: three in 1999 and one in 2001. The orange circles on the diagram identifying these occasions show that three of these combinations precede the 2000 market peak, while one happened during the following decline.
However, when considering the distribution over time of gains the size of todays DJIA and S&P500 changes, they are evenly distributed and appear as often in declining as in appreciating markets.
DJIA .06 percent
NASDAQ .61 percent
S&P 500 .02 percent