Four straight losses are rare: today’s is only the 26th in the 4,400 trading days since the beginning of 1996. Though infrequent –at less than one out of every hundred days- they occur twice as often in bear markets than in bull markets. Yet in expansions, the following day sees prices rising at four times the rate of declines; but in bear markets prices go up at just about the same rate as they fall.
Weakness is the rule so far this month, with the S&P500’s median daily price change negative, at -.33 percent. This compares to increases of .15 percent and .12 percent for July and June. Yet the August number for all of this expansion (since March 2009) comes to about zero, while the medians for July and June are .08 and .10 percent.
Today’s diagram compares the daily closing prices of this bull market with last 2003/2007 expansion. They show many parallels, and we call attention to their recent near equivalents. Further concern should be directed to this bull market’s age, which, at 1,118 days is fast approaching the 1,154 trading day mark at which the 2007 market began its downturn that lasted almost two years.
DJIA -.47 percent
NASDAQ -.38 percent
S&P500 -.59 percent
