June 15, 2011 Largest Drop in 10 Days
The market took back more today than it granted yesterday as prices suffered their worst session since June 1. The NASDAQ lost -1.76 percent and the S&P500 fell -1.74 percent; the DJIA, at -1.46 percent sustained the smallest setback. Though substantial, the S&P500 losses ranked as the 214th deepest in the 2,900 trading days since the end of 1999. The DJIAs setback is the 245th while the NASDAQ stands at 388.
Yet these large losses do not translate automatically into falling prices in the future. The record reveals that the majority of these large price reversals hit at the bottom of declines, just before or just after prices hit bottom. Though only a few occur at market tops, our analysis so far has not pinpointed if this current set indicates a decline or an increase in the days ahead.
The odds for tomorrow, based on the current pattern, favor a further decline. In the past prices on the next day fell three times more often than they increased.
DJIA -1.48 percent
NASDAQ -1.76 percent
S&P500 -1.79 percent