June 22, 2012 More Up and Down
The repeated ups and downs of security prices continues, with today’s gains following Thursday’s declines. Yet only 18 other closes -since 2000- exist with this pattern: the three indices rising after two successive declines by the DJIA and the S&P500, whereas the NASDAQ had only one down day.
The repeats of this pattern have a strange and inconsistent history. They range from just five days to 320 days, with the previous such close 395 trading days ago on November 2010. Further, four others came in intervals longer than 300 days.
Our analysis, so far, fails to find a relationship between the frequency of these repeats and the direction of price changes, as well as the size of the following gains and losses.
Further, the day after has as many declines as gains, with the exception of the current upturn since March 2009. Today’s gain is the first, coming after three successive losses.
DJIA .53 percent
NASDAQ 1.17 percent
S&P500 .72 percent
