All three major stock averages opened the week with higher prices. The S&P500 gain was its fourth plus day in a row, while the DJIA and the NASDAQ moved up after turning down on Friday. This odd pattern happened just three other times since 1996 – with each occurring just once during the last three bull markets.
Our diagram, locating these days, shows that prices fell on the following days. The DJIA, for example, lost 1.2 percent in January 2000, .71 percent in August 1994, and 2.0 percent in May 2009. The S&P500’s history shows similar negatives; it declined 1.0 percent, .8 percent, and 1.9 percent on those days. Only the NASDAQ had a single positive next day, in 2000. Nevertheless, on the very next day, January 4, 2000, it dropped 5.6 percent. On that day, the DJIA declined 3.2 percent while the S&P500 plummeted 3.8 percent.
The future however does not march in lock step with history; yet congruencies like today’s pattern deserve attention.
DJIA .01 percent
NASDAQ .36 percent
S&P500 .20 percent
