Rather than establishing a trend, the market continues to move in opposite directions on an almost daily basis. Thats quite unusual: todays pattern has occurred just 56 times in the near 16,000 trading days since 1950. Yet its frequency is on the rise, with 29 repeats in the last 13 years.
Moreover, while the distribution of these days is about the same in bear as in bull markets, it has increased from .67 percent of all days between 2000 and 2003, to 1.13 percent of the sessions during the 2007/2009 decline.
Chances are about even that prices will move up another direction change- tomorrow, for in the past there have been 15 gains and 13 declines on the following day. However, in the period since the 2009 bottom, next day prices fell twice as often as they increased.
Furthermore, the declines in the current bull market have been substantial: five of the six losses exceeded minus one percent. Still, as if to demonstrate the whipsaws of this pattern, one of the three gains since 2009 exceeded two percent.
Similarly, during the 2003/2007 price expansion the S&P had losing days of -6.7 and -2.2 percent and, in the opposite direction, plus 4.8 percent.
DJIA -1.43 percent
NASDAQ -1.36 percent
S&P500 -1.83 percent
