June 13, 2011 Does Mixed Day Show Upward Promise?
Prices closed with just minute changes as the NASDAQ lost -.15 percent but the S&P500 gained .07 percent and the DJIA eked out .01 percent. Just 150 previous days have this profile, with only 31 since 1999.
The most obvious interpretation is to pigeonhole this pattern with other days of negligible movements: the result of investors hesitation to commit without further indications of which direction the economy, and the market, will take. Yet the NASDAQ history of days in the range of zero to minus .15 percent allows an interpretation of rising future price.
Todays diagram focuses on the NASDAQ closes since 2000; each of the red dots identifies a day of change in the zero to minus .15 percent range. Notice the concentration of these clusters when prices are rising. They amount to 6.8 percent of all closes during the 2003/2007 expansion, but only 2.6 percent and 4.2 percent during the two adjacent contractions. Similarly, they amount to 5.4 percent of all days since the March 2009 price recovery.
Consequently, it seems appropriate to consider these ongoing side-moving days as signaling higher prices in the future.
DJIA .01 percent
NASDAQ -.15 percent
S&P500 .07 percent
