May 20, 2011 The Current Price Line
With todays closings down again, hitting levels seen earlier this year in February and then again, last month, more and more the fear is spreading that perhaps this bull market is phasing out. Yet the record shows the current recovery, begun in March 2009, so far is far shorter than the previous cycle.
The diagram plots the current S&P500 cycle/prices from its earlier highpoint in October 2007 to today, comparing it to the record of the 2000 through 2007 history. The effect is impressive: the previous sequence of rising prices lasted for 1,154 trading days.
That span is more than twice as long as the number of days since March 2009, when the market reached the lowest point of this round.
Yet the up-then-down sequence of daily prices remains, generating inferences that the trend will turn negative. Daily price reversals, however, are far from unusual. Todays is the ninth direction change this month.
While considering the record of frequent changes in prices may not restore confidence, nevertheless, note that about 17 percent of all closes or one out of six- is of opposite sign than the previous day.
DJIA -.74 percent
NASDAQ -.71 percent
S&P500 -.77 percent
