While the decline continued on to its second day, the drop was less severe than the day before. The DJIA’s fall equaled just 3/5th, the S&P500 proportion was 71 percent and even the deeper NASDAQ decrease came to only 84 percent of the previous decline.
Two down days in a row have occurred 265 times over the past five price cycles. They are slightly more common in bull markets -6.2 percent- than the 5.8 percent rate during declines.
That allows some relief, at least, from the automatic fear common at market highs that prices are bound to retreat.
A further positive interpretation arises from the fact that today’s losses approximate the median losses experienced during bull markets. For example, the median S&P500 decline on the second loss in a row comes to -.73 percent during expansions. That is quite close to today’s minus -.67 percent; which in turn is far smaller than the -1.38 percent median S&P500 loss during the last two bear markets.
The same conclusions apply to the DJIA and the NASDAQ. Today’s DJIA loss of -.56 percent is not only smaller than the -.66 percent median bull market loss but less than half of the -1.15 percent median bear market loss.
The NASDAQ proportions are -1.20 percent today, -1.09 percent bull market and -1.20 percent bear market median declines.
These comparisons allow the suggestion that the market remains in an upward bias mode.
The outlook for tomorrow is not as favorable. In the past advances happened about as often as declines in good times as well as when prices were heading down.
DJIA -.56 percent
NASDAQ -1.20 percent
S&P500 -.67 percent