USMarketView

September 8, 2008

Finally, after posting five straight days of losses, the NASDAQ closed up . . . but by just .62 percent. Moreover, that happened late in the afternoon. Meanwhile the DJIA and the S&P500 scored gains in excess of two percent.

Such a configuration happened just 16 times in the past, and never in this century. In fact, the last occurrence was in 1988! Consider the graph below, which plots the closing prices of the NASDAQ between 1970 and 1990. With the vertical lines identifying the dates of these events, it indicates that 12 of these days came during the market decline of 1973 – 1975. The other four are associated with the drop in 1987.

 

These findings require caution before applying history to current projections, simply because of the long time involved. It is reasonable to expect behavior to change over this period – just as the technology of trading is not the same now as then.

Nevertheless, in that earlier period, on the following day, the NASDAQ moved higher on 12 of those 16 days, whereas the DJIA and the S&P500 scored only ten advances.

DJIA 2.59 percent

NASDAQ… .62 percent

S&P500 2.05 percent

This entry was posted on Monday, September 8th, 2008 at 12 042008000000Mon, 08 Sep 2008 16:14:44 +0000 and is filed under Market Report. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.