Prices off more than two percent today suffered their worst day since September 2011. Only 91 other days –in the 4,387 trading sessions since January 1996 – had deeper losses.
Yet there is hope for tomorrow: gains outnumbered losses on the following day. Nearly 64 percent of the next days closed higher.
However in 2011, a series of major reversals lasted six days. The diagram highlights these, revealing their occurrence shortly before this current bull market started to surge.
Today’s setback, the sixth losing session in the last nine days, should be attributed to the continuing focus on the Fed’s announcement of moderation in its debt purchases. Indeed, the yield on the Ten Year Treasuries shot up from 2.31 percent yesterday to 2.42 percent today – that rate of change comes to 4.8 percent, double the losses that hit the stock market today.
DJIA -2.34 percent
NASDAQ -2.28 percent
S&P500 -2.50 percent
