With the NASDAQ and the S&P500 also declining after yesterday’s advances, the record shows only one previous close with today’s pattern. That was on January 15, 2009, just two months before the 2007/2009 decline ended. Accordingly, if that single observation signals anything, it points to prices moving higher.
A similar, same projection results when neglecting the NASDAQ and the S&P500 and consider only the frequency of six successive DJIA losses. Our diagram shows the most recent 18, distributed over the last four market variations. Though crossed the tape during the 1996/2000 expansion, the next two bull markets had 11 such closes. These turned into higher prices and positive closes on eight days, while the other three continued into a seventh consecutive DJIA decline.
Note that the next day outlooks for the seven bear market occurrences have a less favorable stance because the diagram shows an almost equal distribution of five gains and four declines.
While recent data -as well as commentaries- favor a cautious if not a negative outlook, this record of six DJIA losses in a row seems to point to a different, positive stance.
DJIA -.70 percent
NASDAQ -.38 percent
S&P500 -.58 percent
