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June 22, 2011            Market Loses Some of Yesterday’s Gain 

 

 

 

With prices returning some of yesterday’s run-up, this session closed with the three averages down about .67 percent. While it seems reasonable to expect a correction after a good day, the history of the DJIA, NASDAQ and the S&P500 closing prices fail to reveal such reactions. Instead, the record reveals a near equal number of declines and advances the next day.

 

Further, the analysis of these increase by the size of the preceding day’s advance, did not reveal a systematic relationship. Of course, the number of observations declined as the daily gains increased, but the division between the next day’s positive e and negative closes remained quite constant.

 

Today’s pattern –a loss after four increases for the DJIA and the S&P500, and a loss after two gains by the NASDAQ- occurred just twice before. One happened in January 2000 and the other in August 2009. All three indices declined on the following day.

 

As for the projection for today, based on the history of yesterday’s pattern, it worked for the DJIA and the S&P500, but failed for the NASDAQ.

 

DJIA              - .66 percent

NASDAQ      - .67 percent

S&P500          -.65  percent

This entry was posted on Wednesday, June 22nd, 2011 at 12 052011000000Wed, 22 Jun 2011 17:59:01 +0000 and is filed under Market Report. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.