USMarketView

March 28, 2012            Another Decline

The last four sessions, two successive losses following two straight advances, yield a pattern seen just 31 times since the beginning of 2000. These days, furthermore, are distributed almost equally between rising and falling markets. In addition, on the following day, the number of increases is just about equal to the number of declines. Finally, the size of these daily changes is quite constant, whether positive or negative.

It seems reasonable, therefore, to conclude that these dimensions fail to hint at the direction of prices in the future.

DJIA          -.54 percent

NASDAQ  -.49 percent

S&P500     -.49 percent

March 27, 2012      Prices Back Off

Losses characterized today’s trading, but with these markdowns far smaller than yesterday’s gains, the market maintained its positive stance. We direct your attention to the distinctive nature of today’s pattern – a loss following two gains.

The market has posted 80 such closes in this century; prices on the following day moved higher 46 times and fell on 34 other days. However, rather than belonging to periods of rising or falling prices, they cluster in the years 2003 to 2009; the oddity, of course, is that prices rallied between 2003 and 2007, and then fell from 2007 to 2009.

They represent 4.5 percent of all 2007/2009 trading days, and 3.6 percent of the 2003/2007 expansion.

In contrast, they account for just 1.9 percent of all days during the 2000/2003 decline, and 1.3 percent of the closes since the beginning of 2009.

So far, we have not found any dimension or feature useful to project the direction of future price changes.

DJIA          -.33 percent

NASDAQ  -.07 percent

S&P500     -.28 percent

March 26, 2012                  Second Straight Advance

Prices improved more than a full percent as the market posted its largest single day increase in nine trading days -since March 13. While the record shows some 214 other two day sequences in this century, only two followed negative, three day runs. Indeed, there are only 11 such combinations in the entire 63 year span of our data bank.

Today’s diagram pinpoints the last four repeats. It shows these tend to precede pauses in, or changes in the rate of, price appreciation.

In the past, gains outnumbered losses on the following day; however, the last two in this century split evenly, with one advance and one decline.

DJIA           1.23 percent

NASDAQ   1.78 percent

S&P500       1.39 percent

     Good to be back!

March 26, 2011

Still not back to the every-day.

Thought I’d get  back to work today — but failed.

Will try to resume later.

Hope to rejoin the world tomorrow, March 23, and amplify the last post of March 20.

March 20, 2012                Could Prices Top in Just 17 Days?

Published with caution, with just one other data point, USMarketView shows that combining today’s and yesterday’s patterns yields a combination occurring just once before. That was on September 14, 2007, only 17 days prior to the start of the substantial decline that ended in March 2009.

We’ll present the analytics, as well as the caveats, attached to this projection ASAP. However, because of the imminence of this possibility, we stopped our due diligence in order to speed this news to you.

We hope this possibility is just an odd quirk.

DJIA             -.52 percent

NASDAQ     -.14 percent

S&P500         -.30 percent

March 19, 2012                Another Never-Before Pattern

Reversing the previous day’s losses, the DJIA and the NASDAQ moved higher, joining the S&P500 which scored its third gain in a row. However, if this pattern seems commonplace, it is not. Instead it’s unique -the record reveals only one other close with this pattern, and that occurred on January 3, 2007. Whether it’s coincidence or not, that close came just 192 trading days before prices hit their tops on October 8, 2007.

Further, while the market’s advances continue, only the NASDAQ has passed that previous peak. The DJIA and the S&P500 smart advances notwithstanding, they remain about ten percentage points below those historical highs.

Our search for a prototype configuration continues. Yet at this crucial time, we have not achieved the goal of translating these historical data into accurate projections of future prices.

Or frustratingly, unable so far to find the factors that signal the direction of prices in the future.

DJIA              .05 percent

NASDAQ      .75 percent

S&P500          .40 percent

March 16, 2012    DJIA Falls – Ending Run at Seven Gains in a Row

Losing just .15 percent, the DJIA’s declined after posting seven successive advances. While the NASDAQ also fell, the S&P500 closed higher, yielding the pattern of two up days for the S&P and a single down day for the other two indices.

While not as rare as yesterday’s never-before combination, it is quite unusual, with just three previous closes in this century.

The diagram marks these earlier days with a vertical line, while the maroon column shows today’s close. Their past occurrences reveal a negative panorama because two of the three preceded imminent tops with major declines thereafter.

Further, on the very next, following day, prices fell more than -1.2 percent, and the NASDAQ dropped -3.2 percent. However, only moderate declines occurred on September 12, 2007 –just days before the market turned down in October.

DJIA             -.15 percent

NASDAQ     -.04 percent

S&P500          .11 percent

Today’s market closed with a pattern never seen before! Whereas the DJIA   edged up   .12 percent, continuing its advance for the 6th  day in a row, the S&P500 fell, posting its first loss in six days.

However, their prices change were minute, ranging from the S&P500 decline 0f  -.12 percent to the DJIA +.12 percent gain. Surely a day of rest while investors evaluate their options.

Yesterday’s analysis of  price changes  since the 2007 top, we note that both the DJIA and  the S&P500 remain substantially below  those highs. The S&P500 to date recovered only 89 percent of its previous, historical high. While the DJIA’s recovery is more robust, nevertheless this index is no higher than  93 percent.

Given this substantial divergence, three possible alternatives come to mind. The NASDAQ is due for a major reaction, the DJIA and the S&P500 will enjoy a huge advance, or that the NASDAQ will regain its formidable premium of the early 2000′s.

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