Prices stayed nearly the same, now for the third straight session. Though not unusual, it’s a change from the recent hot market. Further, today’s pattern of single day declines of the DJIA and the S&P500 combined with the second advance in a row for the NASDAQ has occurred just 62 times in the 4,360 trading days since 1996.
Though the total happenings are just about as frequent in good as in bad times, gains on the following days are more frequent during bear markets. These positive next days average run more than 80 percent when prices are falling. But the advance average dropped to 58 percent and 53 percent in the 2003/2007 and 1996/2000 bull markets. The days following this pattern have shown increases 60 percent of time since the last low point of March 2009.
Continuing Friday’s analysis of the Fed and its impact on security prices, consider today’s diagram. It shows that the S&P500’s climb since 2009 coincides quite closely with the value of the ten year U.S. Treasuries.
These parallels were far from this adjacent before 2009; that is when the Fed began its aggressive purchases in attempting to buttress the weak economy.
DJIA -.18 percent
NASDAQ .06 percent
S&P500 -.04 percent
