September 26, 2012 More Losses, Fewer Priors
The S&P500 is now down five straight days, the DJIA is down four while the NASDAQ fell for the third day in a row a combination seen only in 1991, and only twice in that year. When will these successive days of unusual, unique and odd patterns cease?
The S&P500 lost -1.90 percent in its negative, five day streak; the DJIA fell -1.34 percent over the past four days while the NASDAQ dropped -2.71 percent since it turned down just three days ago.
Looking at the data for each of these averages individually, note that the S&P500 has only 28 previous runs of five successive losses in this century. It continued down 10 times but recovered on the other 18 days. The DJIA record shows 74 sequences of four losses in a row, with 33 further declines and 41 increases on the following day. The NASDAQ has 187 previous incidents of three successive declines; it moved into positives 100 times but dropped on 87 days to a fourth straight loss.
It is far from unusual though for negative days in September: negative changes outweigh the positives. Over the past 13 years, the daily changes for this month of the NASDAQ average -.12 percent, compared to +.02 percent for the other 11 months. Indeed, the DJIA and the S&P500 daily mean changes are also .02 percent for every month but September. In that month, however, the DJIA average daily change is -.09 percent and -.08 percent for the S&P500.
DJIA -.33 percent
NASDAQ -.77 percent
S&P500 -.57 percent