July 27, 2011 Falloff Continues
DJIA and NASDAQ reported losses for the fourth session in a row, while the S&P500 experienced its third successive decline. Unlike some recent negative days with nominal markdowns, todays were the most substantial since Tuesday of last week.
As noted yesterday, that recent patterns have few antecedents, todays results confirm that description. Only two other days, in the entire database, reveal four consecutive losses for the DJIA and the NASDAQ, while the S&P500 had three declines in a row.
Therefore, projections for tomorrow become impractical. Yet note that our method correctly forecast todays decline.
Todays diagram compares the current cycle with the previous, 2000/2007 decline and recovery. It took 1,835 trading for that earlier sequence to return to its 2000 high. The current market now about halfway to that stretch, provides some assurance that a catastrophic correction is not in works. That is, unless an explanation reveals the reasons why the markets profile is bound to change.
DJIA -1.59 percent
NASDAQ -2.65 percent
S&P500 -2.03 percent
