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June 16, 2011    Another: NASDAQ Declines,      DJIA and S&P500 Rise

 

 

 

Usually, all security prices change in the same direction, but today the market repeated the unusual pattern of the NASDAQ falling while the DJIA and the S&P500 moved higher. There have been fewer than 175 of these in the 2,900 trading days since 1999. Yet, these share a distinct feature during market declines, (1) they occur more often, and (2) there are more declines on the following day.

 

Only 4 percent of the 570 sessions since March 2009, when the current market phase began, had this feature; the previous decline had more than 6 percent.

 

While the following day’s prices fell  64 percent of the time during the 2007/2009 decline, since then only 30 percent declined.

 

Furthermore, the same proportions held during the earlier cycles since 1999.

 

Thus, the price pattern of these indices tomorrow, June 17, could project the market’s direction in the future. A repeat of a NASDAQ decline paired with increases in the DJIA and the S&P500, implies that the market will turn further down in the future.

 

 

DJIA               .54 percent

NASDAQ      -.29 percent

S&P500           .18 percent

 

 

(Published June 17, 2011)

This entry was posted on Friday, June 17th, 2011 at 12 122011000000Fri, 17 Jun 2011 12:21:40 +0000 and is filed under Market Report. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.