August 29, 2011 Close Resembles Turning Point Pattern
Prices moved substantially higher, with the NASDAQ adding 3.32 percent, the S&P500 increasing 2.83 percent, and the DJIA gaining 2.26 percent. These rank, as the 72nd largest for the S&P500, the 95th for the DJIA, and the 105th for the NASDAQ, since the beginning of 2000.
The diagram identifying these days for the S&P500 reveals none has occurred during 2003/2007 bull market. Further, they concentrate where prices are declining. This conclusion seemingly contradicts Fridays headline, that its pattern resembles a bull market pattern.
But it does not. Most of these closes precede lower turning points; while their positions predominate the falling price phases, they cluster immediately before the market turns higher. Thus, the two leaders, Fridays and todays, support each other.
Yet be on the lookout for further large declines: closes on the following day ranged from losses of -4.41 percent to gains of 6.47 percent for the S&P500, minus -4.62 percent to plus 4.93 percent for the DJIA, and to minus -5.01 percent to plus 7.19 percent for the NASDAQ.
As for tomorrow, todays pattern of two up days following a single down day, has repeated 92 times in this century. The NASDAQ fell 37 times on the next day; the S&P500 had 43 losing days, while the DJIA declines total 52.
Fridays projection, of lower closes for today, missed the mark.
DJIA 2.26 percent
NASDAQ 3.32 percent
S&P500 2.83 percent
