May 18, 2011 A Negative Signal ?
The DJIA and the S&P500, up .65 percent and .88 percent, joined the NASDAQs plus 1.14 percent, moving these averages higher for the first time in three days. By adding yesterdays results, we then consider the characteristics of this two-day pattern, rather than todays history in isolation.
The record reveals ten such combinations, five of which occurred since 2000. Two happened during the 2000/2003 decline while the last three came after prices peaked in October 2007.
Note that each of these days happened while the market was trending down; that future prices were becoming smaller with time. As a consequence, projections from todays base results in a scenario of falling prices in the future.
Further, todays gains are substantially smaller than in any of the five previous days. Not only are those earlier median changes almost twice the size of todays gains, but the smallest increase, for each index, dwarf todays results.
As for the following day, in the past, the NASDAQ posted four losses, increasing just once. The S&P500 shows three increases and two losses, while the DJIAs reveals four gains and just one decline.
DJIA .65 percent
NASDAQ 1.14 percent
S&P500 .88 percent