Prices fell again, posting deeper losses than yesterday. The NASDAQ was off -1.40 percent – suffering its worst loss since early November. Further, this day ranks as the ninth most serious decline in 2013. Similarly, the S&P500 decline ranks as the 15th deepest this year.
Today’s pattern of two losses following two successive gains occurred 39 times over the last five price cycles. While our diagram shows that they cluster in falling markets, nevertheless these days also frequent bull markets.
It could be significant that several days happened near cycle turning points. In 2003 there were two , 12 and 2 two days before that cycle hit bottom. In 2007, one took place 13 days after that expansion hit its top. Finally, one materialized just 10 days after the 2009 bottom.
Prices fell on the following day more often than rising – in both expansion and declines. The record shows 20 losses offset by only 12 gains in good times, while there were 7 declines compared to just 5 increases during the two bear markets.
DJIA -.81 percent
NASDAQ -1.40 percent
S&P500 - 1.13 percent
