Both the DJIA and the NASDAQ reversed direction again, more than recovering yesterday’s losses. The NASDAQ, however, fell for the second day in a row. This combination has been seen only 35 other times in this century. Though prices on the following day split almost evenly between gains and losses, our diagram shows that declines outnumbered increases two to one during the last two bear markets. Losses occurred slightly fewer times than next day gains when the trend of prices was up between 2003/2007 and since the low point of 2009.
The magnitude of next day losses deserve a note of caution: they’re extremes ran from minus 2.0 to minus 4.5 percent, in good times and bad.
Overall, regardless of the daily frequency tabulation, since the beginning of 2000 the NASDAQ declined 207 times while the DJIA and the S&P500 averages moved higher. These days accounted for about six percent of all closes; they were distributed almost equally over each of these four market phases.
Yet on the following day, the S&P500 increased 66 percent of the time in the 2009/date period, and 53 percent of the time between 2003 and 2007. But during the bear markets, this index moved in the opposite direction, with higher prices accounting for only 35 percent of closes between 2000 and 2003, and an even smaller 29 percent during the 2007/2009 decline.
DJIA .34 percent
NASDAQ -.17 percent
S&P500 .16 percent
