April 10, 2012 Recent Patterns Mirror Bottoms Not Tops
Todays pattern occurred just once before, on September 3, 2002 near the end of the 2000 bear market. On that day, when the DJIA and the S&P500 closed down for the fifth day in a row, they dropped more than minus four percent.
By comparison, todays closes of about -1.71 percent seem modest, notwithstanding their severity.
Then, on the following day, prices recovered less than half of those losses. Further, the market remained at this depressed level for another two months, before finally turning higher.
Yet despite this technical history, the consensus continues to focus on fundamentals to justify the concern that values will head down.
While brief, these insights from the past indicate that expectations of a major decline are far from convincing.
DJIA -1.65 percent
NASDAQ -1.83 percent
S&P500 -1.71 percent