Though prices declining for three successive days are rare, they occur just about as often in bull markets as when prices are heading down. The average frequency –as shown in the table- is near two percent. They happened as few as 1.5 percent of all days in the current expansion to as many as 2.3 percent in the previous 2007/2009 bear market.
Accordingly, this losing string in and by itself is not an early indicator of a general market decline.
Prices recovered on the following day, near 95 percent of the time. Our diagram shows just minor differences in the number of up and down days over good times and declining markets.
DJIA -.26 percent
NASDAQ -1.08 percent
S&P500 -.49 percent
