USMarketView

The first four trading days of the year just about netted out to zero change in equity values, as increases and declines offset each other. Today’s pattern is new, never recorded since 1950, the start of our data base. Accordingly, no comparisons are available for this combination of a gain for the NASDAQ, after two straight losses; a decline of the S&P500 following three successive gains; and the DJIA’s second decline after three gains in a row.

Today’s analysis instead focuses on single day, opposite changes during the month of January. There have been 452 repeats of the +1/-1 pattern and 398 of the -1/+1 combinations since the beginning of 2000. With 38 of the gain after a single loss, and 35 of the loss after a single gain, respectively, occurring during the month of January. These numbers are almost identical to the expected value of one twelfth of each distributed equally over each of the 12 months of the year.

Today’s diagram reveals that the +1/-1 days and the -1/+1 days occur just about simultaneously. Further, that only two pairs happened when the trend of prices changed from falling to rising.

Of course we can vouch for these conclusions only for the month of January; that we need a closer look and further analysis to confirm that these combinations hold identically on the other, eleven, months of the year.