August 23, 2012 Third Direction Change in Three Days
Both the NASDAQ and the S&P500 posted their third direction change in the last three days while the DJIA fell for the fourth successive session.
The record shows just six such closes in this century, and a total of 13 going back to 1950. The diagram identifies these last six and reveals these occurring mostly when the price trend is up. Based on this history, we project the market continues to point up despite the current pause and sidewise price changes.
Yet in the past, prices fell on the following day, and further, these declines were substantial.
2012 Gains Far Above Average
In the 160 trading days since the beginning of the year, the DJIA increased 9.7 percent; the average gain for any 160 days since the beginning of 2000 is 1.7 percent. Similarly, the NASDAQ rate is 17.9 percent compared to 2.82 percent, while the S&P500 current increase is 11.1%, substantially greater than the 1.2% of the last 13 years.
DJIA -.88 percent
NASDAQ -.66 percent
S&P500 -.81 percent