April 5, 2012 DJIA, S&P500 Down Third Day
But the NASDAQ moved up, after two successive declines. This unusual combination occurred just 11 other times in the past thirteen years. On the other hand, surprisingly, the count rises to 58 when all three indices decline on three successive days.
Yet these similarities aside, we have two distinct events since the price declines average more than minus one percent in this case, whereas todays losses are just -.06 percent for the S&P500 and -.11 percent for the DJIA.
The direction of the market, however, is a more crucial issue though. With the focus of daily headlines on Federal Reserve policy changes, European defaults and other external events possibly overwhelming the dynamics of the ongoing bull market, its imperative to remember that prices never have moved smoothly in any one direction.
As our diagram shows individual daily changes do not reveal the markets underlying direction. Prices fluctuate daily, they do not move smoothly. Unlike a plane taking off and landing, financial markets do not deliver a smooth ride.
DJIA -.11 percent
NASDAQ .40 percent
S&P500 -.06 percent
