December 27, 2012 Fourth Straight Drop

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The sad headline hides some good news.  Today’s losses are so small that only ten other days in this century fell a smaller amount. Further, while this is the 20th repeat of four straight days in the red since the beginning of 2000, prices moved higher on most of the following days. Also, and this is for the longer run outlook, four losses in a row happen with equal frequency –about a half a percent of all days- whether prices are rising or falling.

Finally, as the diagram clearly shows, the NASDAQ gains on the next day outnumber declines 9:1, the S&P500 runs 8:2, while even the trailing DJIA has 7 advances to 3 losses when prices are trending up.

It was just months ago, at the beginning of this past August, that prices had a four day losing streak. But the market recovered on the following day, adding near two percent.

 

DJIA                -.14 percent

NASDAQ        -.14 percent

S&P500          -.12 percent

 

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