August 24, 2012 Fourth Direction Change in Four Days
The see-saws of daily gains followed by daily losses continues, as the DJIA, the NASDAQ and the S&P500 reversed direction, moving higher after yesterday’s declines. Today’s such close is the 501st since the beginning of this century some 3,181 trading days ago.
Prices on the following day, in the past, continued higher for all three of these averages just 219 times – all three averages reported declines on only 165 days. In summary, that results in about a third more price gains than losses.
These iterations of successive daily changes show no relationship to the trend of prices, occurring near as often during bull markets as bear patterns. While 12 percent of all closes during the 2000/2003 decline were ups-then-downs, they rose to nearly 18 percent in the 2007/2009 bear market. Similarly, 15 percent of the 2003/2007 expansion days belonged to this class, but only 11 percent have done so since the 2009 bottom.
DJIA .73 percent
NASDAQ .58 percent
S&P500 .67 percent