July 19, 2011 Five Opposite Changes in a Row!
But its not a record. There have been 22 other runs before, with the last 19 in this century. The graph identifies these closes, but they do not flow in sequences. That means it is not possible to establish whether these changes signal rising or falling future prices.
Calculating just the average change of the S&P500, we see that the two bear segments average much larger changes on these closes than both the bull sections. That points to declining prices, since todays advances range from 1.63 percent to 2.22 percent for the NASDAQ.
However, this result is contradicted when checking the proportion of closes with todays pattern: these proportions favor a call for rising prices in the future.
Accordingly, as you will realize when considering this graphic, it is not possible to use it to derive an indication of a future price trend. Turning to Wednesdays market, note that prices retreated on a substantial majority -12 of the last 19- next days. Further, their incidence was almost the same over each of these four price segments.
DJIA 1.63 percent
NASDAQ 2.22 percent
S&P500 1.63 percent
