The NASDAQ and the S&P500 moved up, at last, after four declines in a row, but the DJIA went down again. Though that loss was a mere -.05 percent, it nevertheless tallies as a decline. This yields a rare combination – indeed, the record shows only three such previous days –with five straight DJIA losses combined with a first day recovery of the NASDAQ and the S&P500. Ordinarily such an infrequent pattern would merit little consideration, yet the fact is that they all happened at crucial points in the price cycles.
Consider today’s diagram, showing their proximity to turning points. Though the earliest one happened days after the 2000 market top, the major part of that three year long decline occurred subsequent to this pattern.
The second of these three events took place in January 2009, just 36 trading days before prices hit the bottom that marks the beginning of the current bull market.
The final happening, in August 2010, is the most interesting. It came just eight days after an intermediate market high and seven days before the following local bottom. This episode cost the S&P500 some 80 points. Then prices took off, climbing with almost no interruption to recent highs.
Obviously three events over the last 17 years of market ups and downs do not rank as a projection guide; nevertheless these extraordinary days deserve attention.
DJIA -.05 percent
NASDAQ .68 percent
S&P500 .38 percent
