January 24, 2012 Small Changes an Upbeat Signal?
Prices moved unevenly with negligible ups and downs, while only four other days closed with todays pattern of one gain for the NASDAQ, one decline for the S&P500, and two drops in a row for the DJIA. All of these however, date back to the last century, with the latest one in 1993. These are too far back to serve as a guide in 2012.
Yet focus on the magnitude of todays market reveals yields important insights which we have pinpointed before namely that small daily price changes cluster when prices are moving higher. The combination of the NASDAQ rising in the range of zero and .09 percent, while the S&P500 and the DJIA were falling by -.10 and -.25 percent, happened just eight times. Further all occurred since 2003.
Most important, they all came in rising markets: six during the 2007/2009 expansion and two since the market bottom of 2009.
These placements tend to confirm our previously stated deduction that negligible daily changes signal rising prices ahead.
DJIA -.25 percent
NASDAQ .09 percent
S&P500 -.10 percent