USMarketView

April 27, 2012           Gains Continue

The DJIA and the S&P500 moved higher for the fourth day in a row whereas the NASDAQ completed its third positive session. This continues the disparity which started on Tuesday, with the NASDAQ declining while the other two averages moved higher. The resulting pattern – plus 4 for the DJIA and the S&P500; plus 3 for the NASDAQ – occurred just three times in the past 13 years.

We focus on this combination because these three indices typically move in the same direction. So while plus three or plus four for each of these averages is the expected combination, the obvious question is whether today’s distinction is just a quirk, or a systematic variation showing unknown or hidden hints of future price changes.

Today’s diagram displays both combinations, with the red dots showing these three ‘odd’ combinations and the greens representing the alternate, all indices up four in a row, days.

One conclusion is clear: both combinations occur when prices are trending up. Only 3 of these 26 closes took place when prices were falling.

Given this history and the recent displays of these uneven frequencies, we’ll continue to focus on these combinations.

In the past, prices fell twice on the following day, increasing only once, back in 2003.

DJIA                    .18 percent

NASDAQ             .61 percent

S&P500               .24 percent

April 26, 2012                                  Prices Continue Higher

The NASDAQ extended its winning streak to two, closing up .69 percent. While smaller than yesterday’s 2.30 percent jump, today’s increase ranks near the 2/3 mark of the 3,100 positive closes since the beginning of 2000.

The DJIA and the S&P500 also moved higher, extending their positive streaks to three days.

On the following day in the past, this pattern yielded more advances than declines, with a ratio of 4:3 in favor of higher prices.

DJIA                   .87 percent

NASDAQ           .69 percent

S&P500             .67 percent

April 25, 2012                   NASDAQ Snaps Losing Days

The NASDAQ jumped 2.30 percent, breaking its near record string of five declines in a row. While large, this gain ranks only as the 226^th largest since the beginning of 2000.

Yet, NASDAQ closes on the following day ranged from minus 7.6 percent to plus 7.2 percent. Such a large span is reasonable if the change, as today’s, is the result of one company’s unusual earnings report.

Today’s pattern, with the DJIA and the S&P500 advancing for the second day in a row, is only its 24^th repeat. On the following day, the record of the past 13 years, shows an even number of further increases and declines.

DJIA                       .69 percent

NASDAQ              2.30 percent

S&P500                1.36 percent

April 24, 2012            NASDAQ Falls Fifth Day in a Row

While unusual, today’s fifth straight drop of the NASDAQ does not imply a significant drop in future prices. While there have been six such closes in the past 13 years, only two occurred during bear market declines. The other four accompanied the 2003/2007 rally.

Moreover, prices actually moved higher on the following day in four of those six days.

Altogether, since the beginning of this century, the market has seen 39 strings of five NASDAQ declines in a row. Yet less than half -only 16- of these fell for six straight sessions.

DJIA                        .58 percent

NASDAQ               -.30 percent

S&P500                   .37 percent

April 23, 2012           NASDAQ Down Again

The NASDAQ lost a full point as it fell for the fourth session in a row. Though the DJIA and the S&P500 also fell, their small increases last Friday kept them out of the ‘down four days in a row’ category.

Today’s combination – NASDAQ down four in a row, while the DJIA and the S&P500 declined after rising the day before- is the 13^th repeat in the past 13 years. Our diagram locating these closes, shows most occurring between 2000 and 2007, with this current close the first since 2009.

Moreover, today’s losses, ranging between -.78 and -1.00 percent, are far smaller than the average loss for this pattern in the past. These were near double, running between -1.18 and -2.03 percent.

Turning to the following day, higher prices, the green dots, dominated expansions. They rose twice as often during rallies than when the market turned down.

DJIA                -.78 percent

NASDAQ       -1.00 percent

S&P500           -.84 percent

April 20. 2012

With the NASDAQ declining for the third straight session, while the DJIA and the S&P500 moving higher after two losses in a row, the market replayed a pattern seen only 17 times in this century. Significantly only four of these came since March 2009.

The other 11 occurred before the 2007 top.

Given that distance and having just 17 observations, any attempt to provide a projection based on these characteristics will be futile and even misleading.
DJIA              .50 percent

NASDAQ    -.24 percent

S&P500        .12 percent

April 19, 2012 Unusual Pattern

Today’s decline of the DJIA, the NASDAQ and the S&P500 marks the 127^th repeat of two-days in a row losses. Yet we find an even rarer combination by stepping back to the day before, with only three other such combinations.

Today’s diagram shows two occurring during the 2000/2003 decline and the third happening 14 months before the 2007 peak. Note that two mark the end of intermediate declines while today’s event fails to provide such clues.

DJIA               -.53 percent

NASDAQ      -.79 percent

S&P500          -.59 percent

Can’t understand how,  nor why, I am suffering a second visit.

I just can’t think!

Hope to return tomorrow, April  17.