Prices remain locked in, as the averages move up, then down without revealing a trend. Yet today’s pattern is a seldom seen combination. The DJIA, the NASDAQ, and the S&P500 declined, after yesterday’s count of NASDAQ up two days in a row while the DJIA and the S&P500 posted gains after losses the day before.
This combination occurred just 35 times since the beginning of 1950, with 22 happening since 1996. Our diagram reveals no discernible alignment indicating next day prices over the last three price expansions and two declines.
Today, as on recent days, another Fed official released his opinion of what will be done about the open market purchases program that continues to support asset values. Here the president of the St. Louis bank expressed concern that too high a rate of price inflation will result. Actually, that is nothing new, since the St. Louis bank’s bias concern inflation is well known and long standing.
We note that this ongoing policy debate in the open is quite rare, for the Fed’s history reveals a predilection for holding its cards close to the vest. Moreover, despite these statements, the interest rate on the ten year Treasury bond has moved higher on each of the last seven trading days.
DJIA - .74 percent
NASDAQ -.41 percent
S&P500 -.52 percent
