Today focuses on the market’s recent spat of unusual patterns, and the frequent repeats of positive increases smaller than .1 percent. While these amount to a little more than five percent of all trading days -or on average one day out of twenty- these negligible daily increases occur just about twice as often when prices are rising.
Our table displays the distribution of these small gains, as well as all other, larger daily increases for the two bear and two bull markets in this century. It reveals how wide they vary between rising and falling price trends. Rather than one day out of twenty, bull markets have them once every 14 days, whereas they happen just once in seven weeks when prices are falling.
Further, losses are more frequent -or gains occur less often- on the days following these small increases. The two lower data sets of the tables reveal that this disparity is wider during bear markets than when prices are trending up.
These characteristics hold also for negative changes of the same magnitude, that is between zero and minus .1 percent.
Accordingly, we suggest that such small positive and negative daily fluctuations prove useful in projecting the market’s future: their frequency implies prices trending higher, while their scarcity means falling values.
DJIA .06 percent
NAS -.21 percent
S&P500 -.10 percent
