September 13, 2011 Another Advance
Prices moved up for the second day in a row, making todays pattern +2/-2. There are 33 previous closes since 2000 with this combination. In the past, the following day moved higher 14 times but fell on 19 days. Note that Mondays projection for today, based on that pattern, saw gains for today. Thus the forecast was correct.
In the past, the comparison of prices of the current, 2007 cycle, with those of the decline that began in 2000, generated a favorable profile. That comparison, updated for todays close, provided a favorable outlook for the current cycle. While the drop in prices was steeper in 2007, it also was much shorter than in the previous cycle.
But that is no longer the case. The record since July 7 when prices started their present decline- shows that now, the sharp drop has been pushing the 2011 price profile below that of the previous sequence. Todays diagram shows the time profile of these cycles.
Note also, that it took 1,895 trading days before the market was able to recover to its previous high. That is nearly double the number of days since the last top began in October 2007.
DJIA .40 percent
NASDAQ 1.49 percent
S&P500 .91 percent
