September 22, 2011 Market Losses Exceed MINUS Three Percent
Prices dropped again, for the fourth straight day. The DJIA fell -3.51 percent, the NASDAQ was off -3.25 percent and the S&P500 lost -3.19 percent. Overall, in the 38 trading days since August 1, the S&P500 plunged 13.4 percent.
Todays diagram shows the S&P500 [in beige] closing prices, beginning in 2000. The vertical lines separate the bear and bull phases over these 12 years. The black line shows the percent change between today and 38 trading days ago, for each day in this century.
This perspective steps back from each day and allows comparisons of the more than 3,000 trading days in this period. It shows that the present 38-day decline is just about the worst since the recovery started in 2009. Yet it also reveals that 38-day losses worse than todays were quite common.
Finally, notice the small range of this 38-day average during the 2003/2007 expansion. Certainly, the current expansion, since March 2009, has a far wider range greater 38 day variance. Yet, the profile of the 38-day price changes is far greater in all the other periods.
This perspective then reveals that the recent deep price declines, while unwelcome, of course, are not very unusual; that we have had instability and huge daily changes quite frequently in these years; and that these could be the result of many other factors than our weak economy and the European problems with liquidity.
DJIA -3.51 percent
NASDAQ -3.25 percent
S&P500 -3.19 percent
