January 17, 2012 Another Down and Up Pattern
Todays uptick just about restored prices to last Thursdays levels. This increase following Fridays losses leaves us with a -1/+1 pattern. It is the 211th repeat of this combination since the beginning of 2000.
The record of these days, unfortunately, yields no insights into the direction of Wednesdays market. Changes on the following day are distributed almost equally between another advance and a decline.
Further, their repeats do not reveal a systematic relationship in the past caused by price trends. While their frequency accounted for 4.6 percent of all closes in the 2000/2003 decline, it more than doubled, increasing to 9.3 percent during the next, 2007/2009, drop.
A similar absence of cause and effect exists also when the trend of prices is up: while this pattern of down-then-up accounted for 8.6 percent of all days in the 2003/2007 expansion, it fell to 6.2 percent during the next, current recovery that began in early 2009.
DJIA .48 percent
NASDAQ .64 percent
S&P500 .36 percent