Archive for November, 2011
Protected: November 11, 2011 Market Ends Higher
Saturday, November 12th, 2011Protected: November 10, 2011
Friday, November 11th, 2011Protected: November 9, 2011 Todays Large Drop and Times Past
Wednesday, November 9th, 2011Protected: November 8, 2011 Rally Gains Strength
Tuesday, November 8th, 2011Protected: November 7, 2011 Another See-Saw Pair
Monday, November 7th, 2011Protected: November 4, 2011 Prices Decline
Sunday, November 6th, 2011November 3, 2011 Another Up Day
Friday, November 4th, 2011
November 3, 2011 Another Up Day
All the three indices moved higher, closing positive for the second day in a row. This pattern of +2 is not an unusual sequence, with 216 repeats since January 2000. Further, these closes seem equally distributed over bull and bear markets, occurring about 8 percent of all trading days.
Looking at the history of the next, following day, about 75 percent have moved higher since the last bottom in March 2009. This ratio, during the previous expansion, however, was only 49 percent. Yet during declines, that percentage hovered around 36 percent.
DJIA 1.76 percent
NASDAQ 2.20 percent
S&P500 1.88 percent
November 2, 2011 Prices Rise in Ongoing See-Saw
Wednesday, November 2nd, 2011November 2, 2011 Prices Rise in Ongoing See-Saw
Gains larger than one percent replaced the substantial declines of the past two days. Yet while large opposite, almost daily, changes dominate the action, the resulting patterns are far from common. Todays combination the three indices up after yesterdays two successive declines of the DJIA and the S&P500 combined with three NASDAQ losses in a row- has occurred on just twenty days since 1950 and eight times in the last 12 years.
Further, we find four of these last eight in the 2000/2003 decline with the other four during the past 2007/2009 bear market. Thus the trend of many recent closes, clustering when the trend of prices is down, continues.
Nevertheless, the market has gained near six percent over the last thirty days. How can these contrary facts exist at the same time?
One approach, shown in the current diagram, explains these contrary facts by a seeming continuity of underlying yet unknown forces that results in these repeats. Whereas the early losses of the current cycle were sharper and faster than the previous, 2000/2007 cycle, and then followed by a slower recovery, by now both cycles run near parallel.
Finally, note that we are now 1,020 sessions from the October 2007 peak; and that the previous cycle lasted 1,895 days before prices returned to their previous high. By this logic, the inference that any major downturn is far in the future, seems appropriate.
DJIA -2.48 percent
NASDAQ -2.89 percent
S&P500 -2.79 percent
November 1, 2011 Losses Near Minus Three Percent
Tuesday, November 1st, 2011November 1, 2011 Losses Near Minus Three Percent
Sharp losses continued but were deeper than the day before. The NASDAQ decline was its third in as many days, while the DJIA and the S&P500 continued their declines to two successive days. This is the 20th repeat, since the beginning of 2000, of the combination.
Our diagram, identifying these closes, reveals that 14 of these iterations happened in the two recent bear markets while only five occurred when the trend of prices was up. Inferring from this distribution between good and bad times, results in concluding that the current negative direction of prices will continue down.
It is not possible to project the price outlook for tomorrow, because this patterns history reveals an almost equal number of gains and losses. Nor can we assess tomorrows direction by inspecting this history, since the plusses and minuses occur equally between good and bad market phases.
DJIA -2.48 percent
NASDAQ -2.89 percent
S&P500 -2.79 percent